▲ 2023 Automobile-related System Changes (Source: Korea Automobile Industry Association)

Extension of tax reduction for eco-friendly vehicles including hybrids
Strengthening the average fuel efficiency and average greenhouse gas standards for passenger cars

The eco-friendly trend in automobile-related systems that will change from 2023, such as the extension of individual consumption tax reductions for eco-friendly vehicles and the strengthening of average fuel efficiency and greenhouse gas regulations, is noticeable.

The Korea Automobile Manufacturers Association announced on the 4th a summary of automobile-related systems that will change in the new year.

First, a system will be implemented to reduce the burden on consumers, such as extending the individual consumption tax and acquisition tax reduction for eco-friendly vehicles.

The individual consumption tax reduction for hybrid, electric, and hydrogen vehicles will be extended by two years and will continue until the end of 2024.

The discount limit is △1 million won for hybrid, △3 million won for electric, and △4 million won for hydrogen.

There is a possibility that the hybrid vehicle acquisition tax reduction, which is currently pending in the National Assembly, will be extended.

The hybrid vehicle acquisition tax reduction will also be extended by two years to December 31, 2024, and the reduction limit will be 400,000 won.

Additionally, the exemption from the obligation to purchase eco-friendly vehicle urban railway bonds will be extended by two years.

Originally, consumers were required to purchase urban railway bonds when purchasing a vehicle, but in order to expand the supply of eco-friendly vehicles, this was exempted for eco-friendly vehicle buyers.
/> The exemption period, which was scheduled to end on December 31, 2022, has been extended to December 31, 2024, and the exemption limits are △2 million won for hybrids, △2.5 million won for electricity, and △2.5 million won for hydrogen.

The average fuel economy and average greenhouse gas standards for automobiles (passenger cars) will be strengthened.

The average fuel efficiency will change from 24.3 km/ℓ in 2022 to 24.4 km/ℓ in 2023, and the average greenhouse gas emissions will change from 97 g/km in 2022 to 95 g/km in 2023.

KAMA added that each manufacturer has different standards depending on the average weight of the vehicles sold.

In the tariff sector, catalytic materials (platinum, palladium, rhodium) for internal combustion engine and hydrogen vehicle exhaust gas aftertreatment devices and permanent magnets, which are essential components for electric vehicles, were selected as items subject to allocated tariffs, and a tariff rate of 0% will be applied for one year (January 1, 2023 to December 31, 2023).