South Korea’s Ministry of Trade, Industry and Energy has announced an investment of 1.5 trillion won (US$1.02 billion) in 2025 to boost domestic EV demand.

This follows a 9.7% drop in EV sales in 2024, marking the second consecutive year of decline, with 147,000 units sold.

The decline has been linked to safety issues, notably following a Mercedes-Benz EV fire in August 2024 that damaged over 100 vehicles and an Incheon parking facility.

To encourage adoption, the government is offering targeted discounts and extend toll discounts for EVs until 2027.

The government aims for EVs to make up 10% of vehicles in driving test centers by the end of 2025.