Chinese EV Makers Target South Korean Market Amid Global Trade Shifts | Be Korea-savvy

Chinese EV Makers Target South Korean Market Amid Global Trade Shifts


BYD ATTO 3 (Image courtesy of BYD)

BYD ATTO 3 (Image courtesy of BYD)

SEOUL, Jan. 13 (Korea Bizwire) — Chinese electric vehicle (EV) manufacturers, led by BYD, are intensifying efforts to enter the South Korean market in 2025, raising questions about their strategic motivations. Analysts suggest this move addresses China’s domestic overproduction while positioning South Korea as a testing ground for expansion into advanced markets.

Industry insiders speculate that China may also be considering South Korea as a strategic export route to bypass potential U.S. trade barriers under the anticipated second term of former President Donald Trump.

Tackling Overproduction with Aggressive Exports

A primary driver behind Chinese EV makers’ focus on South Korea is China’s severe overcapacity in EV production. China’s domestic new energy vehicle market penetration surged from 4.7% in 2019 to 31.6% in 2023, but production capacity has expanded even faster, pushing operating rates below 50%.

By the end of 2023, China had 52 EV brands and 187 models, resulting in fierce domestic competition. The average EV price in China dropped 9.6% in November 2024 to 225,000 yuan (approximately 44.55 million won). Experts warn that Chinese automakers will increasingly resort to aggressive overseas price and volume strategies to alleviate this oversupply.

With the European Union raising tariffs on Chinese EVs to as high as 45.3% and the U.S. planning to increase tariffs from 25% to 100%, South Korea emerges as an attractive export destination due to its comparatively open trade policies and export-oriented economy.

South Korea as a Gateway to Advanced Markets

Analysts also view South Korea as a strategic gateway for Chinese EV brands seeking entry into premium markets. The country’s sophisticated consumers and high purchasing power make it an ideal “antenna shop” to test product competitiveness before scaling to Europe or North America.

According to market research firm MarkLines, South Korea ranked 11th globally in auto sales in 2023, selling 1.72 million vehicles—the fourth-largest market outside of China, North America, and Europe.

Kim Kyung-yoo, a researcher at the Korea Institute for Industrial Economics & Trade, commented, “Success in South Korea could serve as a benchmark for Chinese EV makers to penetrate more demanding markets like the U.S. and Europe.”

South Korea’s slower EV adoption presents a niche opportunity for competitively priced Chinese models. In 2024, electric vehicles accounted for only 9% of South Korea’s new car registrations, compared to the global average of 18%.

Possible Indirect U.S. Market Entry

Some industry experts cautiously suggest that Chinese firms may view South Korea as a backdoor route to the U.S. market. Former President Trump has proposed steep tariffs on Chinese imports, potentially driving Chinese automakers to leverage South Korea’s favorable trade environment under the U.S.-Korea Free Trade Agreement (FTA).

Industry insiders speculate that BYD could utilize facilities left by GM Korea in Gunsan, while Geely-owned Zeekr might produce vehicles through Renault Korea’s plant in Busan.

As trade dynamics continue to evolve, South Korea’s role in the global EV industry is poised to expand, balancing domestic market interests with the influx of competitively priced Chinese electric vehicles.

Kevin Lee (kevinlee@koreabizwire.com)

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