Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Oil price hike boosts demand for EVs
Gasoline and diesel prices are displayed at a gas station in Seoul, Monday. Yonhap
By Lee Min-hyung
The global oil price hike is accelerating consumer adoption of electric vehicles (EVs) in Korea, as prolonged high fuel costs weigh on drivers, according to data and industry officials, Monday.
The trend is evident, with about 52,000 EVs registered from the start of the year through March 10 — more than double the level a year earlier — data from the Ministry of Climate, Energy and Environment showed.
Other data also showed that more consumers prefer fully electric vehicles to hybrids or internal combustion engine vehicles.
According to market tracker CarIsYou, the number of newly registered EVs in Korea reached 35,766 in February, surpassing hybrid vehicle registrations, which totaled 29,112 during the same period. It marks the first time since October 2022 that EV sales outpaced hybrids, ending a more than three-year gap.
The oil price hike, driven by escalating geopolitical tension in the Middle East, is widely expected to continue boosting EV sales here.
Industry officials said the possibility of prolonged conflicts in the Middle East could further increase demand for EVs, as the price of gasoline shows no signs of returning to its pre-conflict level anytime soon, despite the government’s implementation of a fuel price cap.
The average gasoline price at gas stations nationwide stood at 1,829.2 won ($1.21) per liter as of 2 p.m., Monday, much higher than the level before the conflict between the United States, Israel and Iran began. The average figure in February reached 1,688.6 won, according to data from Opinet, the real-time price information system operated by the state-run Korea National Oil Corp.
Aggressive discount campaigns by EV makers have also contributed to the surge in demand. Tesla has reduced prices of its key models by up to 9.4 million won, while domestic automakers, such as Hyundai Motor and Kia, are offering promotions worth millions of won on major EV models, in a bid to boost sales.
Market watchers, however, said that EVs still face hurdles before becoming mainstream, primarily due to insufficient charging infrastructure and relatively high up-front costs.
“It remains to be seen whether EV sales will consistently outpace hybrids and continue to achieve stable growth over the long-term due to lingering downsides of EVs, such as their higher vehicle prices and challenges of a lack of charging infrastructures nationwide,” an auto industry official said.