Up to 4 million won per vehicle produced domestically

Preferential treatment for production outside greater Seoul area

Democratic Party of Korea lawmaker Lee Eon-ju [provided by lawmaker's office]
Democratic Party of Korea lawmaker Lee Eon-ju [provided by lawmaker's office]

Democratic Party of Korea lawmaker Lee Eon-ju, who represents Yongin in Gyeonggi Province, announced Tuesday she had introduced legislation to strengthen the domestic electric vehicle production base and boost the competitiveness of related industries. The bill, formally an amendment to the Restriction of Special Taxation Act, would establish a production tax credit regime for electric vehicles made in South Korea.

Lee said the bill was prompted by a global trend of major economies ramping up support for domestic EV manufacturing. "The United States, the EU, China and other leading countries are expanding tax incentives and subsidies for domestic electric vehicle production in the name of economic security, supply chain resilience and industrial protection," she said. "We also need to put in place production-stage support measures so that companies manufacturing and investing here can compete in the global market."

She added that electric vehicles are a core manufacturing sector with broad upstream and downstream linkages — spanning batteries, automotive electronics, semiconductors, software and materials. "I introduced this bill to establish a tax credit system for EV production in order to prevent the domestic production base from moving overseas and to protect quality jobs and supply chains," Lee said.

Lee also criticized the government's decision to exclude electric vehicles from a domestic production tax credit it has been pursuing. "It is regrettable that the government left electric vehicles out of its domestic production tax credit," she said. "EVs are a strategic product that will underpin South Korea's future industries and economic security, so we must actively support domestic production and investment."

The proposed amendment would add electric vehicles to the list of strategic products eligible for the domestic production tax credit. Under the bill, companies that sell domestically or export electric vehicles produced in South Korea would receive an income or corporate tax deduction based on the number of units sold or exported, with a base credit of up to 4 million won ($2,910) per vehicle. Production outside the greater Seoul metropolitan area would receive a preferential multiplier.


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