As the subsidy policy for electric vehicles that encourages price cuts among finished car manufacturers continues for the second year, interest is focused on whether domestic manufacturers will lower vehicle prices this year.
According to industry sources on the 4th, the Ministry of Environment announced the subsidy amounts for each electric vehicle model on 21st of last month. This year, the price limit for vehicles receiving full subsidies was lowered from 55 million won to 53 million won, but the ceiling for additional subsidies, which are paid in proportion to the manufacturer's vehicle discount amount, was raised from 1 million won to 1.2 million won. For vehicles priced below 53 million won, if the manufacturer provides a discount within the 1.2 million won limit, an additional subsidy will be supported at 20% for discounts up to 5 million won and 40% for amounts exceeding 5 million won.
The government also provided an additional support benefit of 20% within a 1 million won limit last year. At that time, Hyundai applied a manufacturer discount of 1.2 million won to the Ioniq 5 and Ioniq 6. When including inventory discounts, the total discount reached up to 7 million won. KG Mobility also lowered the selling price of the Torres EVX by 2 million won.
Import car manufacturers also set vehicle prices below 55 million won last year in accordance with the subsidy policy. Tesla adjusted the selling price of the Model Y rear-wheel drive (RWD) from 56.99 million won to 54.99 million won, and Volkswagen similarly lowered the ID. 4's price to 54.90 million won, a reduction of 2 million won to meet the full subsidy payment criteria. Polestar reduced the price of the Polestar 2 Long Range Single Motor from the previous 55.90 million won to 54.90 million won, a decrease of 1 million won.
This year, Hyundai Motor Group has initiated promotions to reduce electric vehicle prices. Hyundai has decided to discount the Kona EV by 3 million won, the Ioniq 5 and Ioniq 6 by 1 million won each, and the GV70 and Porter EV by 3 million won. Kia will discount the Niro EV by 2 million won, the EV6 by 1.5 million won, and the Bonggo EV by 3.5 million won. When applying this year's subsidy policy, the Niro EV can receive an additional government subsidy worth approximately 400,000 won, while the EV6 can receive about 300,000 won.
KG Mobility is also considering increasing electric vehicle discounts. While the national government subsidy has been confirmed, subsidies from local governments have not been finalized. A KG Mobility representative noted, "As the electric vehicle subsidies have decreased, we are considering ways to lower customers' actual purchase prices."
In the import car sector, Volvo Car Korea has taken the lead in lowering prices. The selling price of its flagship electric vehicle, the EX30 base trim, has been set at 47.55 million won, a reduction of 1.9 million won from the previous price. The premium trim is now priced at 51.83 million won, down by 3.33 million won. With national and local government subsidies factored in, it is expected to be purchasable in the mid-40 million won range.
This year, as Chinese electric vehicle manufacturer BYD begins selling in South Korea in earnest, there are observations that price competition for electric vehicles may intensify. An industry source stated, "As BYD starts domestic sales, finished car manufacturers are likely to enter the price-cutting competition."