This file image shows an eco-friendly vehicle being charged and another in use. (Image courtesy of Yonhap)
SEOUL, June 17 (Korea Bizwire) — For the first time in South Korean history, eco-friendly vehicles—including electric, hybrid, and plug-in hybrid models—surpassed internal combustion engine (ICE) vehicles in domestic monthly sales, signaling a significant market shift as electric vehicle (EV) concerns begin to ease.
According to data released Tuesday by the Ministry of Trade, Industry and Energy, eco-friendly cars accounted for 51.8% of the 141,865 vehicles sold in May, with sales rising 39% year-on-year to 73,511 units. By contrast, ICE vehicle sales totaled 68,354 units (48.2%).
Hybrid vehicles led the surge with 50,614 units sold, up 31.4% from the previous year, while EV sales jumped 60.3% to 21,445. Plug-in hybrids also saw a sharp 115.9% increase. Analysts suggest this marks a recovery from the so-called “EV chasm,” a period of stalled demand driven by safety and range concerns.
Tesla Model Y (Image from Tesla webpage)
Foreign automakers saw notable gains in the Korean EV market. Tesla sold 6,570 units—up 57.7%—thanks to the success of its new Model Y Juniper, which ranked fifth in overall monthly domestic sales. Chinese automaker BYD also maintained momentum, selling over 500 units for the second consecutive month with its Atto 3 model.
Imported brands overall outperformed domestic automakers in growth terms. From January through May, Hyundai and Kia saw modest year-on-year increases (6.4% and 1.6%, respectively), while Mercedes-Benz, BMW, Porsche, Lexus, and Audi recorded double-digit gains ranging from 9.6% to 43.2%.
Trump Hints at Possible Tariff Increase on Imported Cars. (Image courtesy of Yonhap)
Exports Dip Amid U.S. Tariffs, But Other Markets Offset Losses
Despite strong domestic performance, South Korea’s total automobile exports declined 4.4% year-on-year in May to $6.2 billion. The drop was primarily driven by a 27.1% plunge in exports to the United States, Korea’s largest auto export market, amid the Trump administration’s 25% tariff on imported vehicles and growing emphasis on local production.
The U.S. decline also reflects the ramp-up of local manufacturing at Hyundai’s new Meta Plant in Georgia. While exports fell, Hyundai Motor America reported an 8% rise in U.S. sales in May, reaching 84,521 units.
Outside the U.S., however, Korean auto exports flourished. Shipments to the European Union rose 28.9%, while exports to non-EU Europe, Asia, and Latin America jumped 30.9%, 45.1%, and 42.3%, respectively—helping to cushion the impact of the U.S. market decline.
Green car exports totaled 75,184 units in May, up 10.2% from the previous year. While EV exports fell 11.7% to 21,065 units, hybrid vehicle exports surged 25% to 48,758 units, with plug-in hybrids holding steady at 5,360 units.
However, automotive parts exports—also subject to the 25% U.S. tariff—dropped 9.4% year-on-year to $1.66 billion in May, contributing to a 6.3% decline for the first five months of 2025.
Domestic vehicle production in May fell 3.7% year-on-year to 358,969 units.
As South Korea navigates rapid shifts in both technology and trade policy—amid President Lee Jae-myung’s green transition agenda and escalating U.S. protectionism under President Trump’s second term—the auto industry faces both mounting challenges and transformative opportunities.
Kevin Lee (kevinlee@koreabizwire.com)
