South Korea’s Ministry of Land, Infrastructure and Transport (MOLIT) has revised its low-floor bus subsidy guidelines, effective immediately. Previously, each low-floor bus received a flat subsidy of 87 million won. Under the new rules, subsidies may increase to up to 90 million won per bus, but vehicles featuring low battery energy density are now excluded from eligibility.
The ministry has communicated the changes to local governments, marking the first update to the subsidy scheme in two decades. The revised criteria aim to encourage the adoption of higher-performance battery technologies and improve the overall efficiency of public transport fleets.
Many models of Chinese-made electric buses rely on lithium iron phosphate (LFP) batteries, which are generally more affordable but offer lower energy density compared to the ternary batteries favored by domestic manufacturers. Domestic models typically use nickel-manganese-cobalt (NMC) or other ternary chemistries, which, while costlier, provide greater energy efficiency and longer driving range.
As of last year, Chinese-assembled electric buses accounted for roughly 34% of South Korea’s market share and captured approximately 23% of the previous low-floor bus subsidies. Industry observers anticipate that tightening the battery density requirement will significantly reduce subsidy support for LFP-equipped buses and shift procurement preferences toward higher-density battery systems.
MOLIT commissioned a study in the latter half of the previous year to evaluate performance and amenity-based differential payments. The study’s findings have informed the updated subsidy framework, which aligns financial incentives with performance metrics and environmental objectives. By linking subsidy levels to battery energy density, the ministry seeks to accelerate the deployment of buses with longer operating ranges and lower life-cycle emissions.
Local authorities will implement the new guidelines in upcoming procurement cycles, and bus operators are evaluating fleet upgrades to meet the revised technical standards.
Source: ChosunBiz
