China’s largest electric vehicle manufacturer, BYD, has been shown to be closely trailing Tesla, the world’s top electric vehicle seller in 2024. (Yonhap)
SEOUL, Jan. 13 (Korea Bizwire) — Chinese electric vehicle (EV) manufacturers, led by global EV sales leader BYD, are preparing to enter the South Korean market in 2025, raising questions about their potential impact on the domestic auto industry.
Experts remain divided on whether Chinese brands will struggle to gain traction or disrupt the market with aggressive pricing.
Challenges Similar to Japan’s Market Struggles
BYD’s previous underwhelming performance in Japan suggests Chinese EVs may face similar hurdles in South Korea. Both markets exhibit strong domestic brand loyalty and skepticism toward Chinese products.
BYD entered Japan in July 2022 with ambitious goals of selling 30,000 units annually, but by the end of 2024, cumulative sales barely reached 3,669 units despite heavy marketing and subsidies.
In South Korea, domestic brands commanded 83.8% of the passenger car market in 2024, lower than Japan’s 93.8% but still significantly high.
A Consumer Insight survey in September 2024 found only 9% of prospective South Korean car buyers would consider a Chinese EV, with two in five respondents firmly rejecting Chinese cars regardless of price.
Moreover, South Korea’s sluggish EV adoption poses another challenge. New electric passenger car registrations rose marginally from 115,822 units in 2023 to 122,775 in 2024, still below 2022 levels.
Competitive Pricing Could Shift Market Dynamics
Conversely, Chinese EV brands could disrupt the market by leveraging their price advantage. The Consumer Insight survey indicated that if Chinese EVs were priced at 50-60% of Korean models, 61% of respondents would consider purchasing them. This suggests significant market potential if Chinese automakers pursue aggressive pricing strategies.
BYD is expected to introduce competitively priced models like the Atto 3 SUV and the Seal sedan. Factoring in tariffs, incentives, and subsidies, these models could sell for cheaper by 5-10 million won ($3,800-$7,600) less than comparable Korean vehicles.
BYD’s cost efficiency stems from economies of scale and in-house battery production, providing a pricing edge difficult for competitors to match.
Industry experts warn that this strategy could mirror Tesla’s success with its China-made Model Y. Tesla slashed prices by about 20 million won in 2023 by using lithium iron phosphate (LFP) batteries, making the Model Y South Korea’s best-selling imported car with 18,717 units sold.
Tesla Model Y (Photo: a screenshot from Tesla website)
Strategic Investments by Korean Automakers
Hyundai Motor Group’s record-setting domestic investment of 24.3 trillion won in 2025 is seen as a strategic move to counter the growing threat from Chinese EV brands. Kim Kyung-yoo, a researcher at the Korea Institute for Industrial Economics & Trade, noted that this investment aims to secure market share before the EV market rebounds in the next two to three years.
“If Korean automakers fail to act now, resurgent EV demand could be captured by Chinese brands,” Kim warned.
BYD and other Chinese brands, such as Zeekr, are expected to aggressively expand in South Korea. Industry insiders speculate BYD might utilize GM Korea’s former Gunsan plant, while Zeekr could leverage Renault Korea’s Busan factory.
As competition intensifies, South Korea’s EV market stands at a crossroads, with Chinese automakers poised to challenge domestic giants through aggressive pricing and strategic market entry.
Kevin Lee (kevinlee@koreabizwire.com)
