Car Export Unit Price Hits Record High... The Secret Is Electric Vehicles

[Change of Korea's Industrial Throne ②]
January Export Price per Car $24,818
Maintains Record High Level at Year-End
Increase in Exports Mainly of High-Priced Eco-Friendly Cars

The reason why the center of South Korea's exports has shifted to automobiles lies in electric vehicles. This is because exports of electric vehicles, which have a high price per unit, have increased. This year, South Korea's eco-friendly vehicle exports have reached record highs in both volume and price.

In January this year, the export price per vehicle of South Korean automobiles reached an all-time high of $24,818. The monthly export unit price of automobiles hit a record high of $24,926 in December last year. This year, it is also aiming to exceed $25,000. Until 2002, South Korea's automobile export unit price did not exceed $10,000. It rose to $11,886 in 2007, $13,760 in 2012, $15,147 in 2017, and $23,517 in 2022.

This is thanks to the boom in eco-friendly vehicle exports from last year through this year. The number of exported units in January was 57,000, and the export amount was $1.79 billion, exceeding $1.7 billion for two consecutive months. The share of eco-friendly vehicles in total exports also exceeded 35% for the first time. When the January export amount of eco-friendly vehicles is converted to price per unit, it is $31,400. Compared to the export price per unit of internal combustion engine vehicles, which is around $20,000, eco-friendly vehicles are about $10,000 more expensive.

Domestic electric vehicles are mainly sold in Western Europe and the United States. This is because the electric vehicle charging infrastructure is more widely established there than in other regions. In particular, Europe is rapidly increasing demand for eco-friendly vehicles due to strengthened environmental regulations. Hyundai and Kia electric vehicles are popular overseas for their advanced convenience features, quality of electric vehicle dedicated platforms, and reasonable prices.

Hyundai and Kia launched new models such as the Ioniq 5 and EV6 in advanced markets last year. In January this year, Kia sold 3,913 units of the compact electric sports utility vehicle (SUV) EV6 overseas. Among them, sales in the United States and Europe accounted for 86%. Hyundai's compact electric SUV Ioniq 5 sold 1,548 units in the United States in January, a 56% increase compared to the previous year. January is generally a slow sales month in the U.S. at the beginning of the year. However, the Ioniq 5 continued to sell steadily even at the start of the year.

However, there are concerns that the export volume of domestic electric vehicles may decrease due to the U.S. Inflation Reduction Act (IRA), which came into effect in August last year. Although sales of Korean electric vehicles slowed after the enactment, fortunately, the upward trend has not been broken. Hyundai has requested the U.S. Treasury Department to postpone the implementation of the IRA for three years. Hyundai will expand its electric vehicle lineup in the U.S. next month with the launch of the Ioniq 6. The Ioniq 6 does not qualify for U.S. government subsidies. Instead, it has competitiveness with a top-level local warranty program.