South Korea's automobile production reached around 352,000 units in February, a year-on-year increase of 17.1%, the highest since February 2014, supporting steel demand. In February, domestic sales were 133,000 units, up by 14.8% year on year, and exports were 233,000 units, up by 17.3% year on year, driven by consumption tax exemptions and electric vehicle subsidies.

In January, South Korea reduced the consumption tax on passenger cars to 3.5% and provided an additional 20% subsidy to first-time electric vehicle (EV) buyers aged 19-34, which led to a surge in EV sales. In February, EV sales reached about 14,300 units, a four-fold year-on-year increase. Total sales of new energy vehicles, including EV and hybrid electric vehicle (HEV) reached 60,300 units, up by 50.2% year on year, of which HEV accounted for 73.9%.

The South Korean government planned to invest 21 trillion won by 2025 to develop the new energy vehicle and battery industry and expects the market to continue to grow. However, the US’ new 25% tariff on imported steel and aluminum may affect South Korea's steel and automobile exports.