A growing number of South Korean local governments are running out of electric-vehicle subsidies as demand climbs. On the southern island of Jeju, applications for second-half EV subsidies exceeded the available quota within an hour of opening.
Jeju Province said on the 12th that it was closing early the intake for passenger cars and freight vehicles under its "2026 Second-Half Private Electric Vehicle Distribution Program," which began on the 6th. Applications for electric freight vehicles were already closed on the 7th, and applications for electric passenger cars ended after the 12th.
After distributing 5,161 EVs in the first half of the year, the province secured additional funding and had planned to distribute a further 1,600 vehicles in the second half — 1,200 passenger cars and 400 freight vehicles.
To account for delivery delays and application cancellations, the province decided to accept applications for up to 1,500 passenger cars and 500 freight vehicles. But applications for electric freight vehicles topped 500 within an hour of opening, prompting an early close at 6 p.m. on the 7th. Applications for passenger cars also exceeded 870 within an hour of opening, leading the province to accept submissions only through the 12th.
This year's EV distribution volume rose sharply from a year earlier, but demand outpaced it. Combined first- and second-half distribution amounts to about 6,800 vehicles, more than 1,200 above last year's annual figure of roughly 5,534. That is about 500 more than the 6,300-vehicle target Jeju set for this year. The prolonged conflict in the Middle East and the resulting higher oil prices, which have raised fuel costs for internal-combustion vehicles, are seen as another factor behind the rising EV demand.
With oil prices spiking amid the war between the United States and Iran this year, EVs have grown so popular in some local governments that subsidies have run dry. According to the Korea Automobile & Mobility Association (KAMA), 198,509 EVs were newly registered in the first half of this year, up 113.6% from the same period last year.
EVs accounted for 23.3% of all newly registered vehicles in the first half, which totaled 850,636. Given this, some in the market read the trend as a sign that the EV chasm — a temporary lull in demand — that has persisted for some time is coming to an end.
