Carmakers to ramp up EV marketing amid subsidy cut for next year

Kia Ray EV. [Courtesy of Kia]

South Korean automakers, including Hyundai Motor Group, are busy retooling their consumer marketing strategies after the government decided to reduce state subsidies for electric vehicles next year. With the domestic EV market growth showing signs of slowing down and the reduction in subsidies, there is concern that the incentives for consumers to purchase EVs might diminish. As a result, the industry is gearing up to adopt more aggressive marketing approaches starting from next year.

According to industry sources on Wednesday, the Ministry of Environment has allocated 2.39 trillion won ($1.8 billion) for next year’s green car promotion program, which is 166.4 billion won lower than the current year’s budget.

Under the new program, the basic government subsidy for electric passenger cars will be reduced from the current 5 million won to 4 million won per vehicle. For electric cargo vehicles, the subsidy will be cut from 14 million won to 11 million won per vehicle. EV subsidies are divided into central and local government subsidies, with the latter set to be announced early next year.

Key automotive companies are opting for strategies that prioritize introducing mid-range and affordable EV models rather than immediately lowering the prices of existing premium EVs. They are focusing on reconfiguring their lineup to include EVs that qualify for the maximum 100 percent subsidy, with the intention of driving market growth. Afterward, they plan to gradually adjust the overall pricing of EVs.

Hyundai Motor Group is spearheading the popularization of EVs with models like the Kia Ray EV and Hyundai Casper. The Ray EV stands out as the first Hyundai EV to feature lithium iron phosphate (LFP) batteries, enabling the carmaker to lower the price to the 20 million won range. Kia, on the other hand, is expected to launch mid-range EVs like the EV3, EV4, and EV5 at prices lower than their predecessors.

In addition to price reductions, Hyundai Motor is also aggressively pursuing marketing strategies such as offering up to 1.6 million won worth of “charging credits” to alleviate the operational burden of EV owners.

Imported car companies have proactively shifted their stance toward aggressive price reductions. With few exceptions, conventional imported car companies were more cautious about offering price discounts.

According to car purchasing information platform GetCha, major imported car brands like Mercedes-Benz, BMW, and Audi are implementing EV price discounts of nearly 20 percent for their respective EV models.