South Korea said Friday it will increase subsidies for electric vehicles by 20% next year, unveiling a support package aimed at helping the country’s auto industry cope with risks stemming from U.S. tariffs.

Passenger EV subsidies will rise to 936 billion won ($658.47 million) in 2026, up from 780 billion won this year, the government said, as it seeks to spur domestic demand.

The package also includes expanded support for auto parts suppliers, with authorities pledging to provide policy financing exceeding the 15 trillion won extended in 2025.

Seoul will additionally strengthen guarantee programs for auto parts makers operating in countries such as the United States and Mexico, offering long-term, low-interest loans to help them manage overseas risks.