Tesla’s FSD launch poses threat to domestic EVs

The logo of Tesla is seen on a Tesla Model Y during Tesla's official launch in Bogota, Colombia, Nov. 20. Reuters-Yonhap

By Lee Min-hyung

• Published Nov 29, 2025 3:00 AM KST

Homegrown carmakers under siege by possible import of price-competitive Model Ys with FSD

With Tesla’s much-touted Full Self-Driving (FSD) system making its debut in Korea, Hyundai Motor and Kia face growing risk of losing electric vehicle (EV) market share to the U.S. carmaker, as more price-competitive Tesla models equipped with the service are set to enter the country, industry officials and experts said Friday.

The new software from Tesla enables drivers to enjoy an advanced level of self-driving even in cities with huge traffic jams, such as Seoul. For Korea, Tesla has launched the supervised version of the FSD, so drivers have to keep their eyes forward.

The software is considered a Level 2 system, meaning drivers must remain engaged and monitor road conditions constantly in case of emergency.

Tesla’s Model S and Model X EVs — equipped with the carmaker’s fourth-generation self-driving computer hardware — are available for the software update here.

Data from the Korea Automobile Importers & Distributors Association (KAIDA) showed that around 900 Tesla EVs imported from the United States are eligible for the update here, but most Model 3 and Model Y vehicles — assembled in China — cannot access the service for the time being due to safety certification requirements.

The U.S.-imported Model S and Model X have passed that regulatory hurdle due to the Korea-U.S. Free Trade Agreement (KORUS FTA), but it appears to be taking more time for Tesla vehicles manufactured in China to gain the certification.

However, experts warn that homegrown automakers such as Hyundai Motor, Kia and Genesis will end up losing more ground to Tesla EVs as customer preference for the foreign car brand grows much stronger here.

“It will not take a long time for price-competitive Tesla EVs, such as the Model Y equipped with the FSD feature, to arrive in the Korean market,” said Lee Ho-geun, a professor of automotive engineering at Daeduk University.

“Hyundai Motor and Kia still lag behind Tesla in terms of self-driving technologies, so local carmakers are feared to lose their share further to Tesla in the long run,” he added.

Tesla’s Model Y Juniper is making waves here largely due to widespread perception among customers that the carmaker’s autopilot and self-driving features are the best in the world.

According to data from KAIDA, the Model Y was the top-selling imported vehicle here between January and October. The number of its sales reached 30,759 during that period, outnumbering Korea’s long-standing bestselling vehicles, including BMW Korea’s 520 midsize sedan, whose sales figure came in at 12,408 for the first 10 months.

In 2023, Kia had shared its plan to launch its Highway Driving Pilot (HDP) Level 3 autonomous driving technology for the EV9, but the schedule was delayed to an unconfirmed date.

The KORUS FTA also enabled General Motors Korea to launch its patented Super Cruise hands-free driving service in Korea. For now, the Cadillac Escalade IQ all-electric SUV is the only model with the software available for sale here.

Industry officials said that Korean EV makers will lose more ground to Tesla once the latter’s price-competitive Model Y EVs equipped with FSD arrive.

“As the Model S and Model X are not considered affordable to most Korean customers, Tesla’s inroads to Korea will pick up further steam once reasonably priced models start being imported from the U.S. and customers can access the FSD at a cheaper price,” an official from the auto industry said.