EV sales are stalling — but Tesla continues to surge

Tesla's sales in Korea are surging due to steep discounts while Hyundai and Kia experience declines.

Tesla Korea reduced the sale price of the China-made Model Y to 54.99 million won ($40,049). [SCREEN CAPTURE]

Overall EV demand has stalled across the globe, but Tesla's sales are still surging in Korea, primarily due to steep discounts.

Just 50,157 EVs were sold in the country between January and May of this year, a decrease of 3.1 percent from the same period last year. Tesla's sales, however, increased significantly with 12,087 units sold — while only 1,840 were sold during the same period of 2023.

The dramatic increase began in March, after the government, in February, decreased the price threshold for full subsidies by 2 million won ($1,456), from under 57 million won last year to under 55 million won this year.

Tesla sold 6,025 units in March alone.

Sales in April slightly decreased, totaling 1,722 units, and picked up again in May with 4,165 models sold.

However, Hyundai Motor's and Kia’s flagship EV models, the Ioniq 5 and EV6, experienced a significant decline in sales. The Ioniq 5 sold 5,294 units, and the EV6 sold 3,875 units from January to May, down 59.4 percent and 35.5 percent, respectively, on year.

Tesla's popularity can be attributed to the reduced costs of its models, as both the Model Y and Model 3, which are produced in China, have seen significant price drops.

The vehicles are equipped with Chinese lithium iron phosphate (LFP) batteries, which are cheaper than conventional lithium-ion batteries but also offer a shorter range . The reduction in price has contributed to the increase in sales. Tesla reduced its prices by about 2 million won in response to the government's revision of its EV subsidy policies in February.

In February, the government significantly cut subsidies for EVs equipped with LFP batteries, which have lower energy density and less recycling capability. For example, the subsidy for the Tesla Model Y rear-wheel-drive model dipped under than 2 million won this year from around 5 million won last year. Tesla adjusted the Model Y's price to below 55 million won from 56.99 million won to qualify for the full subsidy.

Tesla sold 5,934 units of the Model Y in March, making it the top-selling imported car.

Kia recently introduced the small electric SUV EV3, priced between 42.08 million won and 51.08 million won, in response. Considering EV subsidies and environmentally friendly vehicle tax benefits, the EV3 is forecast to be priced at around 30 million won.

Hyundai is also focusing on maintaining its upward trend in the U.S. market. The company secured an 11.2 percent market share between January and May of this year, accounting for 48,838 of the 437,246 EVs sold in the United States. Hyundai's and Kia's combined share of the United States' EV market reached a record high between January and May of this year.

Kia's large SUV, the EV9, sold only 1,112 models domestically but achieved 7,766 units in the United States during the same period.

BY PARK YOUNG-WOO, CHOI HAE-JIN [choi.haejin@joongang.co.kr]