"My Tesla Model Y Is Made in China?"... Shanghai Factory Supplies Coming to South Korea

Shanghai Factory Model Y Completes Domestic Environmental Certification
Production Increases Boost Nearby Exports... Also Sold in Canada
Ranked 2nd Best-Selling Global Car Last Year

Tesla has decided to sell vehicles made at its China factory in South Korea. Until now, only vehicles made at Tesla's U.S. factory have been sold domestically. Chinese-made Teslas have price competitiveness, leading to strong sales not only in China but also worldwide, playing an important role in Tesla's growth.

Tesla China Shanghai Gigafactory. Produces Model 3 and Model Y.

According to reports compiled on the 25th, Tesla Korea has completed domestic environmental certification for the mid-size sport utility vehicle (SUV) Model Y made at the China factory. While environmental certification is not required for imported vehicles brought in by individuals, it is necessary to obtain certification from the Korea Environment Institute to sell vehicles through official import procedures domestically.

The certified vehicle this time is the Model Y rear-wheel drive (RWD) model, which previously received a 100% electric vehicle purchase subsidy in Korea and was considered a 'cost-effective' model. Tesla currently sells only two versions of the Model Y domestically: the all-wheel drive (AWD) Long Range and the high-performance version (Performance). A Tesla Korea official said, "There are no confirmed details or plans regarding the specific launch schedule to disclose at this time."

The Tesla Gigafactory in Shanghai, China, is the company's first overseas factory, which began construction in 2019 and started production at the end of that year. The initial annual production capacity was 250,000 units, which has reportedly increased to nearly 1 million units. The factory produces relatively affordable models in Tesla's lineup, including the Model Y and the compact sedan Model 3. Tesla's position as the world's number one in pure electric vehicle sales is largely due to the increased productivity of the China factory.

Model Y being produced at Tesla's Germany Gigafactory, which began operations last year

The Model Y has become a global best-selling car as SUV demand has increased worldwide alongside the electrification trend. When considering the single most sold model globally, compact sedans popular in Europe and emerging markets or pickup trucks popular in the U.S. usually rank high. Recently, this has changed. Last year, the global number one was the Toyota compact sedan Corolla, but the second place was taken by the Tesla Model Y. The sales difference between the two models was less than 50,000 units.

Even in China, where competition has intensified with various electric vehicles launched mainly by local manufacturers, the Tesla Model Y remains popular. The top-selling electric vehicle in China last year was the ultra-low-cost small electric vehicle Wuling Hongguang Mini EV, followed by the Tesla Model Y. Approximately 860,000 Model Ys were sold worldwide last year, with over 450,000 sold in China alone.

Tesla has recently increased production at its Shanghai factory and expanded exports to surrounding regions. Before preparing for the Korean launch, Tesla began exporting the Model Y rear-wheel drive variant to Canada. According to the specifications of vehicles sold locally, the range is over 20% shorter than the Long Range model, but the price is nearly 10 million KRW cheaper. The U.S. has a Tesla assembly plant and does not apply tax credits, which can be considered subsidies, for foreign electric vehicles, but Canada does not have such conditions.

Electric SUV Atto 3 by Chinese electric vehicle maker BYD

With the full-scale launch of Tesla China factory vehicles in South Korea, there is growing interest in whether imports of Chinese electric vehicles, which have recently slowed, will increase again. China has become a strong automobile exporting country by rapidly increasing electric vehicle development and production not only by local makers but also by global automakers. However, imports of Chinese electric vehicles in South Korea remain at levels similar to previous years.

This is interpreted as a result of subsidies being granted based on electric vehicle battery performance this year, which has reduced demand for Chinese electric vehicles that had rapidly increased mainly in commercial vehicles. According to electric vehicle trade statistics, Chinese electric vehicle imports to South Korea reached 166 million USD last year, about four times higher than the previous year, but this year, until last month, imports were only 43 million USD, a 3% increase. Considering that South Korea's total electric vehicle import value increased by about 70%, the market share has declined.