Tesla and BYD dominate South Korea’s booming EV market

Tesla and BYD are sweeping South Korea’s electric vehicle (EV) market, outselling local brands such as Hyundai and Kia. Tesla’s Model Y led the imported EV market last year, accounting for over 50,000 units, while BYD gained rapid popularity with affordable models like the Atto 3.

The market share of electric vehicles among imported cars increased by 12 percentage points last year, from less than 10% in 2023 to 18% in 2024. Of this 12%, Tesla recorded the highest market share among all newly registered EVs in the country. 

Tesla dominated the market with around 60,000 units, followed by Chinese BYD with 6,107. German brands such as BMW, Audi, and Porsche lagged with 5,821, 4,427, and 3,626, respectively. Polestar, a Swedish EV model, sold 2,957 units, up 269% from the previous year. The increase made the Volvo’s electric vehicle rank sixth in sales.

According to the South Korea Import Car Association, the nation imported one out of every two electric cars sold there last year.

Price cuts and affordability drive Tesla, BYD EV surge

Tesla’s Model Y and BYD’s Atto 3 increased the demand for foreign EVs, especially among younger consumers. According to the Chosun Daily, a local news outlet, Tesla rapidly penetrated the SK domestic market by significantly reducing prices of producing the Model Y at its Shanghai factory in China.

Tesla unveiled the base Model Y in 2023. It was priced around 20 million Korean won, or around $15,385, cheaper than previous models.

Tesla reduced the price by 20 million Korean won, or around $15,385, to around 49,990,000 Korean won ($38,453)  by the end of last year. This happened after Tesla equipped the vehicle with Chinese-made lithium-iron Phosphate (LFP) batteries and reduced the specification from dual motors to single motors.

Regarding the Chinese BYD, last year it introduced several affordable electric car models, including the Atto 3, with 3,076 units. Following the successful debut of the affordable Atto 3, the business launched the Seal with 369 units, then the mid-size SUV Sealion 7, which sold 2,662 units in just four months, spurring further expansion.

The Chosun Daily, a local news outlet, reported that the Atto 3, which is usually priced at 30 million Korean won ($23,000), may be bought for as little as 20 million Korean won ($15,400) with subsidies, significantly increasing customer accessibility.

BYD increased its market share by focusing on price competitiveness. As a result of price competitiveness, BYD became the second-largest brand in imported electric vehicle sales within a year of entering the South Korean domestic market.  The business currently runs 16 service facilities and 28 showrooms across the country.

SK imported car market shifts as EVs surge, hybrids dominate

On January 12, the South Korea Automobile Importers & Distributors Association (KAIDA) reported that passenger car registrations by fuel type for 2025 totaled 91,253, a significant 84% increase from the year before. EVs accounted for 30% of the total 307,377 imported cars sold in SK.

On January 17, The Asia Business Daily, a local news outlet, reported that in the same time frame, there were 174,218 hybrid cars (including plug-in hybrids), accounting for 56% of the market. Nevertheless, this was only a 5 percentage point rise over the 51% from the prior year.

The report noted that sales of internal combustion engine cars drastically decreased as the eco-friendly trend overtook them. Only 12% of the market was gasoline-powered vehicles, which fell to 38,512 units, a 62% decline from 62,671 units the year before. Just 3,394 diesel cars were sold in South Korea, accounting for hardly 1% of the market.

According to the report, the market for imported automobiles is expected to see numerous new electric vehicles introduced this year. BYD is expected to introduce the compact electric hatchback “Dolphin,” which completed domestic certification in October of last year. However, because the domestic small hatchback market has not expanded as expected, the business intends to set the launch date strategically.

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