Korea has such a tiny EV market. Why is China pushing to break in?

BYD’s Atto 3, the first passenger EV from the Chinese EV giant, is on stage at its Korean launch event on Jan. 16 in Incheon. [YONHAP]

[NEWS ANALYSIS]


Following BYD’s bold entry into the Korean market, a cadre of Chinese EV brands like Zeekr, Changan and even Xpeng are now eyeing Korea as their next destination — even if it means absorbing losses to gain a foothold.
 
While their go-to-market strategy seems to rely heavily on “low price,” here’s the paradox: Korea represents only a tiny fraction of the global EV market, with just 120,000 EVs sold annually in the country, making it roughly one-hundredth the size of China’s own, or far smaller than one-tenth of the United States’.
 
Experts observe that it is closely intertwined with China’s broader bid for global legitimacy, driven by a mounting pushback from the United States and Europe, which have imposed tariffs up to 100 percent on China-made EVs. 
 

 
Liu Xueliang, general manager of the automaker’s Asia-Pacific auto sales division, said, “We don’t have a specific sales target for the Korean market, but we simply hope consumers will take the time to experience BYD and assess its value for themselves,” during the launch of the Atto 3 EV in Korea in January. 
 
In fact, BYD set the sticker price of the Atto 3 in Korea at 31.5 million won ($22,800), which drops to around 29.9 million won after government subsidies. That same model sells for 38,000 euros ($44,000) in Europe, 4.5 million yen ($30,400) in Japan, and 899,900 baht ($27,800) in Thailand.
 
The sticker price of Seal, which was introduced in July, has been set at 46.9 million won, around 8 million won cheaper than Australia’s price of 61,990 Australian dollars ($40,400) and some 10 million won cheaper than Japan’s 6.05 million yen.
 

 


Blocked by the West, Korea emerges as a detour
With China’s once-booming domestic market showing clear signs of saturation, the country now finds itself in a position where exports are no longer optional, but imperative for sustaining growth and industrial momentum.
 
But hemmed in by tariff wars with the United States and Europe, China is targeting the Asia-Pacific region — and Korea, in this strategic maneuver, could be a fitting and effective gateway.
 
Sales of Chinese cars reached 31.43 million units last year, a 4.5 percent increase from the previous year. But of that growth, domestic sales only inched up by 1.6 percent, while exports jumped by 19.3 percent — indicating that Chinese automobile brands are increasingly relying on exports as a primary engine of growth — a shift that appears not only strategic, but inevitable.
 
But China remains shut out of the U.S. market, the world’s second-largest auto market with annual sales of 16 million units, due to strict export restrictions. U.S. President Donald Trump raised tariffs on Chinese EVs from 25 percent to 100 percent, while the European Union also upped the tariffs from 10 percent to 45.3 percent starting in October last year.
 
 

Zeekr’s 7X mid-size SUV, which is rumored to be the first model to enter the Korean market. [JOONGANG ILBO]

 
“Chinese EV exports to Korea are up significantly in 2025, and this is partially a story of trade diversion, as their exports to the EU have fallen significantly since the latter’s introduction of tariffs in late October,” Joe Webster, senior fellow at the Global Energy Center of the Atlantic Council, a Washington-based think tank focused on promoting trans-Atlantic cooperation and international security, told the Korea JoongAng Daily.
 
“But there may be more than one element at play. Chinese EV manufacturers and battery original equipment manufacturers have an interest in crushing foreign competitors and establishing a global monopoly, by price-undercutting Korean EV manufacturers and battery players — perhaps China’s most capable rivals.”
 
Chinese EV exports to Korea hit an all-time high of 29,295 units in the first half of the year, or $808.8 million, according to data from the General Administration of Customs of the People’s Republic of China. In terms of units, that’s around a 31 percent jump from the first half of 2024.
 

BYD’s Seal sedan on a track in Yongin, Gyeonggi. [BYD KOREA]

 
Korea: A shortcut to global cred?
Korea has a mature yet trend-conscious auto market — with consumers known for discerning and demanding tastes — one that Chinese automakers may leverage as a strategic asset to enhance their credibility and standing on the global stage.
 
While the domestic market ranks only 11th in size globally, the country stands as the world’s fourth-largest auto exporter, trailing only China, Germany, the United States and Mexico. Hyundai and Kia have firmly established themselves among the world’s top 3 automakers for three consecutive years.
 
“BYD’s ultimate target is Tesla — and with Tesla having already cemented its success in Korea, BYD is now seeking a head-to-head showdown in one of Asia’s most discerning consumer markets, aiming to prove that its quality can stand shoulder to shoulder with Tesla,” said Professor Kwon Yong-ju, an automotive and transport design professor at Kookmin University.
 
“A company’s fundamental goal is profit, but BYD has set the lowest price. With tariffs and dealership commissions, they are sacrificing margins, with little to no profit expected,” he added. “What they’re really after in making an entry into Korea, even at a loss, is the reputation and consumer evaluation.”
 
Chinese automakers had their sights set on this goal early on, beginning with the commercial vehicle segment. In 2022, Chinese-made electric buses accounted for 41.8 percent of all newly registered electric buses in Korea. By last year, that figure had climbed to 54.1 percent — more than half the market.
 
“Zeekr and Xpeng are likely to enter the Korean market with a similar low-price strategy,” Kwon added. “While Zeekr is positioned as a premium brand in China, it’s expected to price itself somewhere between Tesla and Genesis to find a viable niche.”
 
 

Liu Xueliang, general manager of BYD’s APAC auto sales division, introduces the Seal EV at the Seoul Mobility Show held at Kintex, Goyang, Gyeonggi, on April 3. [BYD KOREA]

Chinese EVs for export are waiting to be loaded at Yantai port in Shandong Province, eastern China. [AFP/YONHAP]

 
A backdoor for surplus
Or perhaps, the influx of Chinese EVs in the Korean market can be attributed to simple offloading of excess inventory by oversupplied Chinese companies. 
 
Not only is Korea geographically close, but it also only imposes a mere 8 percent tariff on imported Chinese EVs.
 
Automotive inventory in China reached 3.5 million units in April, marking the highest level since December 2023, according to data from the China Passenger Car Association, even as local production facilities operated at partial capacity. China has around 150 auto brands, either on its own or in joint ventures, and their average production rate was around 50 percent as of last year.
 
“Faced with a sluggish domestic market and overcapacity, Chinese manufacturers are institutionalizing large-scale exports to global markets — particularly to Korea and the broader Asia-Pacific region — posing a serious challenge to the competitiveness of domestic players,” said researcher Cheon Seong-hyun from Posco Research Institute.
 
“The spillover of Chinese products is causing more than just a decline in individual companies’ revenues or profit margins; It is now prompting broader concerns over the need to restructure the domestic industrial landscape in the long term.”
 
 

Crowds flock to see Zeekr cars at CES 2025 in Las Vegas. [NEWS1]

 
In fact, BYD’s Seal EV, launched in Korea in early July, has faced backlash for being an outdated model from 2022 rather than the newest model unveiled in August last year. The controversy stems from the absence of key features such as the Lidar-based advanced driver assistance system known as “God’s Eye,” and ultrafast charging technology — which were omitted from the models released in Korea.
 
The issue is not without precedent. A similar criticism arose in January of the Atto 3, BYD’s first passenger vehicle introduced to the Korean market, for being a dated version from 2022.
 
BYD Korea issued an official statement denying the accusations, saying that the car in question was “not just inventory, but a Korea-specific model, configured to meet local certification standards.”
 
“The latest Seal model was developed exclusively for the Chinese market and is not available in Korea or any other overseas markets,” BYD Korea said. 

BY SARAH CHEA [[email protected]]