Tesla Korea, First Ever 20,000 Sales
Bold Pricing Strategy Led by China-made 'Model Y'
Model Y Sales from Jan to Jul Surpass Mercedes-Benz E-Class
Chinese EV Companies Eyeing Korean Market Under Close Watch
Tesla has surpassed the 20,000-unit mark in the domestic market for the first time ever. This was thanks to the China-made rear-wheel-drive ‘Model Y,’ which dramatically lowered the price by more than 20 million KRW compared to the existing US-made version, creating a sensation in the domestic market. There is also an interpretation that the full-scale invasion of China-made electric vehicles with price competitiveness has begun.
According to Kaizyu Data Research Institute on the 5th, Tesla Korea sold 20,060 units in the domestic market from January to July this year, surpassing last year’s annual sales volume (16,461 units). This is the first time Tesla’s domestic sales have exceeded 20,000 units since entering the Korean market in 2017.
This was largely due to Tesla Korea changing the production site of the mid-size electric sports utility vehicle (SUV) ‘Model Y’ sold in Korea from the second half of last year. The China-made rear-wheel-drive Model Y is equipped with a low-cost lithium iron phosphate (LFP) battery, which slightly reduces performance but drastically lowers the price by more than 20 million KRW. China’s geographical proximity to Korea also reduced logistics costs.
As of August, Tesla Korea sells the rear-wheel-drive Model Y domestically for 52.99 million KRW. With national subsidies and local government subsidies combined, in Seoul, it can be purchased for the high 40 million KRW range, and in some areas of Gyeongnam, for the high 30 million KRW range.
Additionally, Tesla began importing the mid-size electric sedan Model 3 from China in April, lowering the price by nearly 10 million KRW. The Model 3 also uses an LFP battery, reducing the actual purchase price to the high 30 million KRW range at most.
As Tesla creates a sensation in the domestic market with China-made electric vehicles, the imported car industry has been significantly shocked. As of January to July this year, Tesla Model Y sales reached 11,664 units. This surpassed the domestic representative imported bestseller, the Mercedes-Benz E-Class (10,412 units), and is closely chasing the BMW 5 Series (11,801 units).
Tesla’s annual sales breakthrough of 20,000 units is also causing tension among domestic automakers. Based on cumulative sales from January to July this year, Tesla’s domestic sales exceeded Kia’s electric vehicle sales (18,758 units) during the same period. By model, the Model Y (11,664 units) sold more than Hyundai’s Ioniq 5 (8,892 units) and Kia’s EV6 (6,649 units).
Chinese electric vehicle brands considering entry into Korea are closely watching the successful Korean debut of the China-made Model Y. There is an expectation that this success will help reduce Korean consumers’ resistance to China-made products.
Chinese electric vehicle brand BYD is conducting preliminary work such as certification and securing dealerships to launch passenger cars in Korea. Zeekr, a premium electric vehicle brand under China’s Geely Automobile, is also exploring entry into Korea.
An official from the imported car industry said, "There is a clear technological and psychological difference between US brands’ China-made electric vehicles and Chinese brands’ China-made electric vehicles. However, it cannot be denied that the success of China-made Tesla in Korea has lowered the psychological barrier toward Chinese electric vehicles."
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