In January 2024, Tesla saw a solitary electric vehicle (EV) sale in South Korea, marking its lowest sales performance since July 2022. The lone unit sold was the Model Y SUV, underlining mounting concerns in the country regarding EVs manufactured in China. Issues such as pricing challenges and an inadequate charging infrastructure have also contributed to dampened demand for EVs in the Korean market.
Data compiled by researcher Carisyou and the Korean Trade Ministry reveals an 80% decline in new EV registrations in January compared to December 2023. Factors such as higher interest rates and inflation have been cited as influencing consumer reluctance to invest in EVs. Additionally, concerns persist regarding EV fires due to battery overheating, alongside the scarcity of fast chargers in urban areas across Korea. Notably, the China-made Tesla Model Y was among the top-selling brands in 2023.
While overall EV demand in Korea is declining, Tesla's sales slump may also be linked to its perceived association with China. A recent survey indicates that while many Koreans who desired Tesla cars have made purchases, some consumers have developed reservations after discovering the Chinese manufacturing origins of certain models. Quality concerns regarding manufacturing in China have contributed to this sentiment among Korean consumers.
The subdued sales figures for January could also reflect seasonal consumer behavior in Korea. Typically, January sees a lull in EV purchases as consumers await government announcements regarding subsidies. A Tesla spokesperson in Korea noted that consumer EV purchases were postponed pending confirmation of subsidies.
In July 2023, the Model Y's price was set at 56.99 million won ($43,000), qualifying it for full government subsidies. However, a recent regulatory announcement has revised the threshold for EV subsidies to vehicles priced below 55 million won, resulting in a potential 50% reduction in subsidies for the Model Y. It remains uncertain whether Tesla will adjust to the new subsidy regime, though the company expresses optimism that demand in Korea will rebound.