How made-in-China captures one-third of Korea's EV market

BYD electric vehicles are seen on display on the opening day of the Beijing Auto Show, Friday. AFP-Yonhap

HONG KONG — Electric vehicles (EVs) made in China now account for one in every three new EV registrations in Korea, as Tesla’s Shanghai-built models power the surge and Chinese carmakers start to gain traction.

Chinese auto manufacturers have further room to expand, analysts said, supported by higher fuel prices linked to the U.S.-Israeli war on Iran and looser restrictions than traditional target markets. Still, they cautioned that tightening subsidy regimes could slow the pace of expansion.

Sales of China-made EVs in Korea soared to 25,000 units in the first quarter of 2026, marking a 286.1 percent increase from a year earlier, according to data from the Korea Automobile and Mobility Association. Over the same period, Korean carmakers sold around 51,000 units, but grew at a much slower pace of 126.1 percent.

The market share of EVs manufactured in China surged from 4.7 percent in 2022 to 33.9 percent last year, while that of Korean EVs fell from 75 percent to 57.2 percent, according to data released on April 22.

“Most (Chinese) firms have identified overseas expansion as a growth pillar of 2026, in light of slowing EV demand at home,” said Xu Tianchen, senior economist at the Economist Intelligence Unit. “South Korea is certainly one of the target markets.”

Chinese EV models exported to the country were initially concentrated in commercial vehicles such as buses, while passenger cars struggled to challenge the dominance of Hyundai Motor and other Korean brands.

That began to change in 2024, with the expanded presence of competitively priced, technologically advanced models. Yet the biggest driver of growth for China-made EVs in Korea is not a Chinese brand but Tesla, whose Shanghai-built models have become increasingly popular, said Troy Stangarone, a nonresident fellow at the Carnegie Mellon Institute for Strategy and Technology.

Tesla sells its models in Korea with slightly lower specifications — including a shorter driving range and smaller battery capacity than versions made in the United States — while cutting prices by as much as 10 million won ($6,740).

The company’s sales jumped 311 percent from 2022 to 59,916 units in 2025, Stangarone said. It was Korea’s best-selling imported brand in the first quarter of 2026.

A car carrier transporting Tesla vehicles travels past Kia vehicles parked at a port in Pyeongtaek, Gyeonggi Province, July 2025. Reuters-Yonhap

The market’s momentum, however, is no longer centered on Tesla alone. Chinese brand BYD has begun to outperform expectations, surpassing 10,000 cumulative sales in just 11 months from April last year — one of the fastest growth rates among imported brands — and now ranking fourth.

Following BYD’s entry, other Chinese EV makers including Zeekr, Xpeng and Chery Automobile are preparing to enter the market.

“As a leader in quality and affordability, Chinese brands are well-placed to compete in Korea,” Stangarone said.

Korea ranked as the eighth-largest market for Chinese EVs in 2025, according to energy think tank Ember, behind countries such as Belgium, the United Kingdom, the United Arab Emirates and Australia.

The country offers room for growth, according to analysts, with fewer trade barriers than the U.S. and Europe alongside rising demand from the Iran war and broader disruptions to energy markets.

The U.S. imposes tariffs of more than 100 percent on Chinese EVs, while the European Union has levied duties of up to 45 percent. By contrast, Korea’s tariff stands at just 8 percent, with no major policy shift expected as bilateral ties warm, Xu said.

Still, policy support is set to become more conditional. Starting in July, carmakers will be assessed against seven criteria — including research and development (R&D) investment, job creation and localized component sourcing — with subsidies awarded only to those scoring 80 or above.

“The framework is likely to put Chinese manufacturers at a disadvantage, given their limited local R&D footprint and supply chain integration,” said Claire Yuan, director of corporate ratings at S&P Global Ratings.

Future market penetration could hinge on their willingness to invest in the country, she added.