The election of President Lee Jae-myung in 2025 marked a significant turning point in South Korea’s policy direction. As climate crisis, energy transition, and industrial competitiveness emerge as top priorities globally, South Korea is also taking proactive steps to adapt. The Lee administration is leading the eco-friendly transition centered on the automotive industry, while simultaneously introducing comprehensive policies covering industrial restructuring and trade response strategies.
Eco-friendly automobile policy under this government goes beyond simply increasing EV adoption. It encompasses the battery supply chain, charging infrastructure, the gradual phase-out of internal combustion engine vehicles, and preemptive responses to global trade challenges. This article outlines the key initiatives announced or pursued by the Lee administration.
1. EV Adoption Target: 50% by 2030
The Lee administration has laid out a blueprint to convert more than half of passenger vehicles to EVs by 2030. This is a core implementation measure for Korea’s 2050 carbon neutrality roadmap and a foundation for industrial transformation.
While maintaining the existing EV subsidy system, the government is shifting it toward real demand-based distribution. Subsidies for luxury imports or short-term investment-driven purchases will be limited, while low-income earners and essential vehicle users (like delivery workers and small business owners) will be prioritized.
For instance, additional subsidies are available when replacing old diesel cars with EVs. The Ministry of Environment has also set a target of over 4 million EVs on the road by 2026.
2. Expanding Charging Infrastructure in Daily Life
The lack of charging stations remains the biggest barrier to EV expansion. To address this, the Lee administration plans to invest 3.5 trillion KRW over five years to significantly expand the national charging infrastructure.
The government will require slow chargers in apartment complexes and multi-unit dwellings, while installing fast chargers along highways and commercial areas. The “multi-use charging station” model in partnership with gas stations will also be expanded.
In rural or low-income urban areas, mobile charging vehicles or public charging stations will be deployed. The goal is to create an environment free of charging anxiety, supplemented by real-time locator apps and reservation systems.
3. Gradual Phase-Out of Internal Combustion Vehicles; Hybrids as a Transitional Option
Previous administrations pushed for an aggressive ban on internal combustion engines by 2040. However, the Lee administration is taking a more flexible approach based on industry and consumer readiness.
Hybrid vehicles are recognized as a realistic transitional option before full EV adoption. A grace period will be applied, with a long-term shift toward zero-emission vehicles.
The policy prioritizes scrapping old diesel cars and converting commercial fleets— especially for logistics, rentals, and delivery services. This includes low-interest financing and tax incentives.
The strategy is characterized by minimizing industrial resistance while promoting substantial transformation.
4. 100% Public Sector Transition to Zero-Emission Vehicles by 2030
To set a strong example, the Lee administration mandates that all vehicles owned by central and local governments and public institutions transition to 100% zero-emission vehicles by 2030.
This includes police, fire, and military vehicles, as well as public shuttles and city buses. In major cities, converting public buses to electric and hydrogen models is a top priority.
Public facilities must install charging stations, and vehicles jointly operated with the private sector will also be converted. Pilot programs will be expanded to provide free EV shuttles to low-income communities under the “Green Transport Welfare Zone” initiative.
5. Battery Industry Development and Supply Chain Independence
The battery is the most crucial component in the EV ecosystem. Although South Korea has global battery leaders like LG Energy Solution, Samsung SDI, and SK On, it still relies heavily on imported materials.
The Lee government views batteries as the “next semiconductor” and is pursuing all-around development strategies. National R&D investment will be increased in solid-state and lithium-sulfur batteries. Production and testing hubs will be established in Chungcheong, Yeongnam, and Honam as part of the “Battery Triangle Belt”.
“Resource diplomacy” will also be strengthened with African and South American nations to ensure stable access to lithium, nickel, and cobalt. Furthermore, battery recycling and reuse industries will be promoted to tackle waste issues.
6. U.S. Subsidy Exclusion and Trade Response
After May 2025, sales of Korean EVs in the U.S. dropped sharply due to the Inflation Reduction Act (IRA), which excluded non-U.S.-made EVs from federal subsidies.
South Korea is responding through the following strategies:
- Hyundai is expediting the launch of its EV plant in Georgia, while LG and others are accelerating battery factory completions in the U.S.
- Export strategies are being adjusted by temporarily increasing hybrid vehicle shipments.
- The Ministry of Trade and Ministry of Foreign Affairs are negotiating with the U.S. to relax subsidy eligibility criteria, while also preparing for regulations like the EU’s Carbon Border Adjustment Mechanism (CBAM).
- The domestic market is being strengthened through streamlined certification and local demand expansion.
This is not only a short-term defense but also a strategic step toward structural transformation of Korea’s EV industry.
Conclusion: A Feasible, Inclusive Transition
The Lee administration’s eco-friendly automotive policy is more than just expanding EVs— it’s a comprehensive strategy encompassing energy transition, industrial innovation, export competitiveness, and welfare.
The key to success lies in execution. For genuine change, public engagement, policy consistency, and community integration are essential.
If balanced well between sustainability and feasibility, these policies could define the next era of Korea’s automotive industry.
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