Chinese Electric Vehicle Imports to South Korea Surge, Reshaping Market Dynamics

Tesla Model Y (Photo: a screenshot from Tesla website)

SEOUL, Sept. 19 (Korea Bizwire) – In a significant shift in South Korea’s automotive landscape, imports of Chinese electric vehicles have surpassed the 1 trillion won mark this year, according to data from the Ministry of Trade, Industry and Energy and the Korea International Trade Association. 

From January to July, South Korea’s battery electric vehicle (BEV) imports reached $1.29 billion, marking a 13.5% increase compared to the same period last year.

This surge comes despite ongoing concerns about the so-called electric vehicle “chasm” – a temporary stagnation in demand – and lingering fears over electric vehicle fires.

Chinese-made electric vehicles dominated the import market, accounting for 66% of the total with $848 million in sales. This represents a staggering 848% year-on-year increase, catapulting China to the top spot among countries exporting electric vehicles to South Korea.

Germany, previously the leading exporter, fell to second place with $338 million in sales, followed by the United States ($44 million) and the United Kingdom ($23 million). 

The dramatic rise in Chinese EV imports is largely attributed to the arrival of “Chinese Teslas” – vehicles produced at Tesla’s Shanghai Gigafactory. These models, imported since the latter half of 2023, offer more competitive pricing compared to their American-made counterparts.

According to the Carisyou Data Research Institute, sales of the Tesla Model Y skyrocketed by 395.4% in the first half of 2024, with 10,041 units sold. The Tesla Model 3 also performed strongly, ranking fourth in sales with 7,026 units sold during the same period. 

While most Chinese electric vehicles imported to South Korea have traditionally been commercial vehicles such as buses and trucks, this trend is set to change.

Chinese electric buses have already established a strong foothold in the South Korean market, capturing a 40.7% market share in the first half of this year, closely trailing domestic brands at 59.3%. 

The landscape is poised for further transformation as Chinese automotive brands prepare to enter the South Korean passenger car market.

BYD, China’s largest automaker, is slated to launch its affordable electric vehicles in South Korea in the latter half of this year, potentially driving Chinese EV imports even higher.

This shift has raised concerns about the competitiveness of South Korean automakers, both at home and abroad.

While Chinese brands are expanding their presence in major overseas markets, particularly in Europe where they captured over 18% of the pure electric vehicle market in the first half of this year, South Korean exports of pure electric vehicles to China remain virtually non-existent.

This one-sided trade dynamic is contributing to South Korea’s trade deficit.

The Korea Automobile & Mobility Association (KAMA) reports that Korean electric vehicle brands saw their global market share slip from 10.4% last year to 9.6% in the first half of 2024.

This decline comes as Chinese electric vehicle manufacturers are aggressively expanding into international markets, challenging South Korean automakers not only in their home market but also in key export destinations like Europe.

Industry experts emphasize the need for South Korean manufacturers to innovate their production methods and optimize supply chains to remain competitive.

A recent report from the Korea Institute for Industrial Economics and Trade stressed the importance of conducting thorough analyses to understand the sources of Chinese price competitiveness, noting that “In our market and in emerging markets, (Korean automakers) are significantly lagging behind Chinese electric vehicles in terms of price competitiveness.”

Kevin Lee (kevinlee@koreabizwire.com) 

_{Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.}