The government will provide policy financing of nine-point-seven trillion won, or around seven-point-one billion U.S. dollars, this year to help domestic battery and auto industries become self-reliant.

The financing was announced on Wednesday at a meeting of the government and the private sector led by industry and energy minister Ahn Duk-geun, following a recent U.S. decision to extend tax credits for electric vehicles(EV) containing Chinese graphite until the end of 2026.

While domestic battery and carmakers have secured a two-year grace period, the minister stressed that diversifying and obtaining stability in managing key mineral supply chains remain as major tasks for the mid to long term.

With local firms' reliance on Chinese graphite, a key secondary battery anode material, nearing 90 percent until last year, Seoul has also pledged to support securing of overseas mineral access through the Indo-Pacific Economic Framework for Prosperity(IPEF) and the Minerals Security Partnership(MSP).

The U.S. Inflation Reduction Act(IRA) provides up to seven-thousand-500 dollars in tax credits to buyers of EVs that met sourcing requirements and were assembled in North America.