Tesla, BYD capitalize on Korean automakers' wage strike

Tesla and BYD are gaining ground in Korea, filling the void created by prolonged labor strikes at major domestic automakers in August.

Combined domestic sales by Hyundai Motor, Kia, KGM, Renault Korea and General Motors (GM) Korea fell 28.3 percent from a year earlier to 79,601 vehicles last month, according to data from the Korea Automobile Importers & Distributors Association (KAIDA). All the five carmakers reported year-on-year declines.

Hyundai Motor was hit particularly hard, with domestic sales plunging 41.1 percent to 34,333 vehicles. Production disruptions caused by a series of partial strikes by its union weighed heavily on vehicle output and deliveries.

Hyundai workers staged partial walkouts from July through August, with the cumulative strike time reaching about 60 hours. This is estimated to have caused production losses of roughly 55,000 vehicles.

Kia fared better, but its domestic sales still declined 7.6 percent to 40,213 units. The automaker was also affected by the strike and reduced production days during the summer vacation season.

The fall in sales shows that supply-side disruptions played a significant role in August's sales decline.

Imported vehicle sales, however, rose 9.2 percent to 29,817 units in August. Tesla and BYD accounted for much of the increase, highlighting a growing shift in Korean consumer demand toward price-competitive electric vehicles (EVs).

Tesla sold 10,400 vehicles in August, while BYD sold 3,002. Their combined sales of 13,402 units accounted for about 45 percent of total imported car sales.

Tesla alone captured roughly one-third of the imported car market, while BYD continued to rapidly expand its presence despite being a relatively new entrant to the Korean market, having debuted here in January 2025. Tesla’s sales were driven by its China-made Model Y EV, while BYD’s Dolphin electric hatchback was the company's best-selling model last month.

The figures show a structural shift in Korea’s imported car market, which has traditionally been dominated by premium German brands such as BMW and Mercedes-Benz. Rather than broad-based growth across imported brands, the August increase was largely driven by strong demand for reasonably-priced EVs.

“Demand for affordable EVs is rapidly growing, and the trend is unavoidable amid the industry’s rapid shift toward electrification,” an official from the auto industry said. “As customers still remain sensitive to EV prices, which are relatively higher than typical vehicles with internal combustion engines, price-competitive EVs are gaining growing traction here.”

However, domestic carmakers are expected to increase their sales this month as Hyundai Motor and Kia reached wage agreements with their unions late last month, easing concerns over additional production disruptions.