National Assembly Mobility Forum holds 2nd seminar

US, EU impose tariffs and bolster domestic industry support

Forum debates R&D, supply chain measures to sharpen competitiveness

[Provided by KAMA]
[Provided by KAMA]

As Chinese electric vehicles flood global markets with aggressive low-price strategies, South Korea is stepping up debate over introducing a domestic production tax credit to protect its auto industry. With the United States and the EU imposing steep tariffs on Chinese EVs and reinforcing support for their own industries, calls are growing in South Korea for stronger tax and investment incentives tied to domestic production.

The National Assembly Mobility Forum, a research group of lawmakers, held its second seminar of 2026 on Friday at the National Assembly Members' Office Building, focusing on ways to strengthen the competitiveness of South Korea's EV industry. The event was hosted by the forum and co-organized by the Korea Automobile Manufacturers Association and the Korean Mobility Society.

The seminar examined the competitive landscape of the global EV market and the overseas expansion strategies of Chinese companies, with discussions covering legislative, tax and industrial policy measures needed to shore up South Korea's domestic production base and technological edge.

Chinese EV makers, buoyed by extensive government backing, have been rapidly expanding their global footprint — pushing exports through low prices while aggressively building local production capacity abroad. As a result, competition in the EV market is shifting from a contest between individual companies to a national industrial rivalry in which government support, trade policy, production infrastructure and supply chains all play decisive roles.

Major auto-producing nations have responded by strengthening protections for their own industries. The United States levies tariffs of up to 127.5 percent on Chinese EVs, while the EU imposes duties of up to 45.3 percent on Chinese battery electric vehicles. Japan, too, has moved beyond purchase subsidies and charging infrastructure expansion to link support directly to domestic battery and EV production, aiming to secure the competitiveness of its EV sector.

South Korea, by contrast, has little beyond an 8 percent tariff on Chinese EVs. The gap has intensified pressure on the government to act more decisively in defending the domestic auto industry's production base. There are signs of movement: Lee Hyeong-il, the nominee for minister of the Ministry of Economy and Finance, recently said he would gather industry views on introducing a production-linked tax credit.

Yoon Han-hong, co-chair of the National Assembly Mobility Forum, said the era of 1 million EVs on Korean roads had arrived but that an urgent response was needed to defend domestic industry against Chinese price competition. He noted that he had introduced an amendment to the Restriction of Special Taxation Act in August to include EVs in the domestic production tax credit, but said the measure alone was insufficient. He added that he would push for broader support legislation and regulatory reform covering not only production tax credits for domestically made EVs but also technology development, supply chains and charging infrastructure.

Bae Jun-young, the seminar's lead research lawmaker, said in welcoming remarks that raising EV competitiveness required strengthening the entire industrial ecosystem — batteries, key components, charging infrastructure, safety and supply chains. He said he would support corporate innovation and investment through legislation and policy that reflected industry voices, and help position the future mobility sector as a new engine of growth.

Jung Dae-jin, chairman of the Korea Automobile Manufacturers Association, said EV competition had become a national contest combining technology, production, supply chains and government support policy, and that companies could not counter the Chinese offensive on their own. He called for production tax credits, demand expansion, research and development and facility investment support, and stronger core supply chains to underpin domestic investment and global market competitiveness.

In the main presentations, Park Jeong-gyu, a professor at KAIST's Graduate School of Management of Technology, spoke on the current state of China's EV industry and its overseas expansion strategies. Yoon Kyeong-seon, a managing director at the Korea Automobile Manufacturers Association, then analyzed the domestic EV market and the inroads made by Chinese EVs, proposing a range of measures including a domestic production tax credit, production-linked support programs, R&D and facility investment support, stronger core supply chains and stable EV demand incentives.

The National Assembly Mobility Forum said it would build on Friday's discussions to identify policy priorities for countering Chinese EVs' growing presence in the domestic market and sustaining the production base and technological competitiveness of South Korea's EV industry, while continuing to advance related legislation and institutional reforms, including the production tax credit.


eyre@heraldcorp.com