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The Korea Herald
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THE INVESTOR
March 29, 2024

Automobiles

Can Tesla, BYD boost sluggish Korean EV market?

  • PUBLISHED :November 27, 2016 - 16:15
  • UPDATED :November 28, 2016 - 14:04
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[THE INVESTOR] The world’s two leading electric vehicle makers, Tesla Motors and BYD Auto Co, are set to hit the Korean market which has so far this year witnessed a sluggish growth in pure electric cars.

According to the Korea Automobile Manufacturers Association and the Korea Automobile Importers and Distributors Association on Nov. 27, a total of 53,631 new energy vehicles, including plug-in hybrid electric vehicle, battery electric vehicles and fuel cell electric vehicles, were sold in the first 10 months of the year in Korea, an increase of 63.8 percent year-on-year. 


World's largest EV maker BYD's vehicle lineup



Most of this growth, however, has been driven by hybrid cars, which occupy 94.2 percent of the total new energy car market.

Despite government subsidies, only 2,896 battery-powered electric cars or 0.15 percent of the total cars sold in Korea, were sold during the cited period. 

This sluggish performance might change with the entry of the world’s top two EV makers, who are taking different tracks for market entry. 


BYD for EV buses


BYD, the world’s largest EV maker, officially registered for its branch in Jeju Self-governing Province, the EV hub in Korea, according to the Shenzhen-based company on Nov. 24.

“At this early stage, our focus in Korea will be electric buses as we focus on public transportation for overseas markets,” a BYD official told The Korea Herald on the condition of anonymity. “But we cannot rule out the possibility of introducing other vehicles.”

BYD’s electric bus to be introduced in South Korea is the K9. Two local suppliers -- Ezwelfare Co and Suncore -- have already signed contracts with the Chinese company as regional distributors for the K9.

BYD’s debut comes as South Korea’s EV initiatives are not being met by local supply. Jeju Governor Won Hui-ryong last year said the city wanted to increase the supply of electric buses, but it was very difficult to meet the demand by purchasing only Korean brands.

The Jeju municipal government plans to adopt a total of 110 electric buses by the end of 2017 and build 22,400 units of chargers around the island in 2017 as part of a plan to make a carbon free city by 2030.

Tesla premium EVs

While BYD will focus on public transportation here, US premium electric car maker Tesla plans to go after up-market consumers with its futuristic design who have not been enticed by the available options.  

Tesla is setting up showrooms in Korea -- one in Starfield Hanam, some 20 kilometers southeast of Seoul, and another in the bustling upscale Gangnam district. Tesla was expected to launch its showroom in the Starfield Hanam at the end of Nov. but it has been delayed, according to Starfield Hanam operator Shinsegae on Nov. 20.

Nicolas Villeger, director of North Asia & Southeast Asia at Tesla Motors, said on Nov. 18 in Seoul that the company will launch the Model S and Model X first next year, followed by the Model 3.

According to local reports, Villeger said the Korean team is still being formed and the registration and certificate process with the government has not been completed yet, indicating sales of Tesla vehicles are being delayed.

While Tesla’s models are not eligible for the current government subsidy program, Villeger said that the company is in negotiation with the Ministry of Environment to change the four-year-old program, arguing its standards lag behind advances in technology. 

Even though the growth of battery-powered electric cars has been slow, the debut of BYD and Tesla might boost the EV market in the country especially next year.

“Since the market strategies are different among Tesla, BYD and domestic carmakers, the impact of the entry of Tesla and BYD will be limited in the short term. However, it will certainly provide a strong growth momentum for the overall domestic EV market in 2017,” Shin Jae-young, an analyst with LIG Investment & Securities Co. wrote on No.v 23.

By Park Ga-young/The Korea Herald (gypark@heraldcorp.com)

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