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(LEAD) Seoul considers extending tax benefits on eco-friendly cars: finance minister

All News 15:25 June 25, 2019

(ATTN: UPDATES with background in paras 3-10)

SEJONG, June 25 (Yonhap) -- South Korea is considering extending a temporary tax cut on purchases of all-electric and hydrogen fuel-cell electric cars, the finance minister said Tuesday, in the latest move to help eco-friendly cars expand their presence here.

Since 2017, the government has waived a 5 percent special excise tax on purchases of all-electric and hydrogen fuel-cell electric cars. The temporary tax cut is set to end in December this year.

Hong Nam-ki, the minister of economy and finance, said that the government will unveil a set of measures next week to boost auto sales here.

Hong made the comments in a meeting with executives of Hyundai Motor Co. and other carmakers at an exhibition center in Goyang, just northwest of Seoul.

The move came as South Korea is pushing to increase the number of eco-friendly vehicles and scrap old diesel cars to help reduce fine dust air pollution.

In January, South Korea said it will increase the number of hydrogen fuel-cell electric vehicles to about 80,000 units by 2022.

A hydrogen fuel-cell electric car only releases water vapor as it converts stored hydrogen into electricity to turn the motor.

Global carmakers have been racing to go eco-friendly amid tightened regulations on greenhouse gas emissions, which scientists say are to blame for global warming.

The number of environment-friendly vehicles, such as hybrid electric, all-electric and hydrogen fuel-cell electric models, sold in the January-May period reached 65,030 units, up 27.9 percent from the same period in 2018, according to data from the Korea Automobile Manufacturers Association and foreign automakers.

The domestic market share of environmentally friendly vehicles was 10.6 percent in the January-May period, up 2.6 percentage points from a year earlier, the data showed.


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