Chinese EVs Surge in South Korea Amidst Domestic Sales Slowdown

According to a report released by the Korea Institute for Industrial Economics & Trade (KIET) on September 10th, electric vehicles (EVs) produced in China are rapidly rising in the South Korean market, accounting for 33.1% of the market share.

Last year, the sales of battery electric vehicles (BEVs) grew by 10.6% in major countries worldwide. However, BEV sales in South Korea saw almost no growth and even declined by 15.3% in the first half of this year. Meanwhile, battery demand also slowed down, dropping from 38.6% last year to 22.3% in the first half of this year.

Chinese EVs have always dominated the global market, accounting for over 68% of global production last year and in the first half of this year. In Thailand, 84.2% of EV sales last year came from Chinese brands. In the European market, the share of Chinese EVs surpassed 18% in the first half of this year.

The report states that the import of Tesla vehicles made in China into South Korea is the main reason for the increase in the market share of Chinese-produced EVs in South Korea from 14% last year to 33.1% this year.

The study highlights the significant price difference between vehicles made in China and those made in other countries. According to JATO data, the average price of Chinese-branded EVs in major markets is only half that of other brands. This price competitiveness is attributed to a well-developed domestic parts supply chain, with over 70% of global battery production capacity concentrated in China.

The institute stresses that the fundamental issue is the high price of South Korean EVs, which cannot be solved by subsidies alone. It also emphasizes the need for innovation in production methods and supply chain efficiency, recommending a thorough analysis to understand the source of China’s price competitiveness.

To respond to the slowdown in South Korean EV and battery sales and the rise of Chinese EVs, the institute believes there is an urgent need to develop strategies. It suggests pursuing differentiation in areas such as autonomous driving, smart features, and design. In addition, the institute emphasizes the need to adjust investment and operational plans according to market trends and new forecasts for the BEV market.

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