The number of beneficiaries of government subsidies for purchasing hybrid cars will be cut from 40,000 to 32,500 next year.
The Environment and Labor Committee of the National Assembly recently held a meeting and decided to reduce the subsidies for 2015 by 7.5 billion won (US$6.7 million) to 32.892 billion won (US$29.555 million).
The ruling Saenuri Party and the Ministry of Environment, back in September, decided to add a subsidy of 1 million won (US$898) per vehicle to the previous tax incentives for hybrid car customers while putting off grant a low-carbon vehicle subsidy from next year to 2021. A total of eight models, including the Sonata, K5, and Prius, benefit from the policy that becomes effective on the first day of 2015.
However, opposition lawmakers in the committee were opposed to the postponement, mentioning that the ministry overestimated the new yearly demand for hybrid cars. During the most recent three years, the average hybrid car sales volume was 25,000 units a year, 15,000 less than the ministry’s estimate.
The lawmakers reached an agreement with the others on the condition that the budget for hybrid cars would be lowered while measures would be sought to avoid putting off the implementation. According to the ministry, the revised budget plan is scheduled to be fixed this or next week.