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South Korea Raises 2026 EV Subsidies 20%, Expands Support to Shield Auto Sector from U.S. Tariff Uncertainty

Seoul is pressing Washington to publish a joint fact sheet before a promised cut in auto tariffs can take effect.

Overview

  • Passenger EV subsidies will increase to 936 billion won ($658 million) in 2026, up from 780 billion won this year.
  • Policy finance for auto parts suppliers will surpass the 15 trillion won provided in 2025, with strengthened guarantees for overseas operations in the U.S. and Mexico offering long-term, low-interest loans.
  • A leaders-level agreement to reduce U.S. tariffs on South Korean autos to 15% from 25% remains unimplemented because no joint fact sheet has been issued.
  • Foreign Minister Cho Hyun asked U.S. Secretary of State Marco Rubio to expedite release of the joint fact sheet during G7 meetings in Canada, Yonhap reported.
  • Some media report Seoul is preparing an MOU with the U.S. and exploring special legislation to facilitate investments and tariff reductions, though these steps are not officially confirmed.