Among Every 10 Electric Cars Sold in the First Half of This Year, 3 Are Tesla: Reasons Behind the Korean Surge?

[Asia Economy Reporter Woo Su-yeon] In the first half of this year, 3 out of every 10 electric vehicles sold in South Korea were Teslas. Tesla, which continues its dominance in the global electric vehicle market, has aggressively increased its market share in the domestic electric vehicle market, where the domestic automaker Hyundai Kia Motors holds strong, and now controls more than 30% of the market.

According to Kaizyu statistics on the 12th, the number of electric vehicle registrations in the first half of this year was 22,080, a 27% increase compared to the previous year. During the same period, Tesla sold 7,079 units, accounting for 32% of the domestic electric vehicle market. Among them, the affordable sedan 'Model 3' sold 6,839 units.

Narrowing the scope to the imported car market, the Model 3 ranked third in sales in the domestic imported car market in the first half of this year, including both electric and internal combustion engine vehicles. The Model 3 was selected as the third best-selling imported car after the traditional best-selling imported cars, the Mercedes-Benz E-Class and BMW 5 Series. It is also unusual for an electric vehicle to be among the top three imported cars.

Tesla Model 3

South Korea’s Aggressive Subsidy Policy Lowers Actual Purchase Price of Model 3... Securing Price Competitiveness

Experts explain Tesla’s surge in the Korean market from various perspectives such as price, design, marketing methods, and paradigm shifts in vehicles. First, the active subsidy policy of the Korean government had a significant impact. By securing electric vehicle subsidies of up to 18 million KRW, Tesla achieved price competitiveness in the mid-30 million to mid-40 million KRW range, making Tesla models accessible to general consumers.

Comparing the prices of Tesla Model 3 in major countries, Korea’s actual purchase price is relatively cheaper than other countries. Including subsidies, the actual purchase price of the Tesla Model 3 Standard Plus trim in Seoul, Korea, is 41.26 million KRW, while it is 42.66 million KRW in Shanghai, China, and around 43.22 million KRW in California, USA (based on exchange rates and subsidies as of July 5).

Comparison of Base Prices and Actual Purchase Prices (After Subsidies) of Tesla Model 3 in Various Countries
(*Standard Plus Trim, Exchange Rate as of July 5) / Source: Tesla Website and Foreign Media Compilation

In Gyeongsangbuk-do, which offers the highest electric vehicle subsidies in Korea, the Model 3 can be purchased for 35.76 million KRW. This means it has a price competitiveness advantage of over 10 million KRW compared to other major metropolitan areas. Compared to major Asian countries such as Japan (53.81 million KRW) and Taiwan (65.52 million KRW), Tesla is relatively affordable in the Korean market.

However, there are criticisms that the base price in the Korean market remains high due to reliance on sufficient subsidy policies. The base price of the Model 3 Standard Plus in Korea is 53.69 million KRW. Considering prices in China (46.09 million KRW), the USA (45.56 million KRW), Hong Kong (51.07 million KRW), and Japan (57.02 million KRW), it is on the higher side. A Tesla Korea official explained, "Due to various factors such as transportation costs, customs clearance, and exchange rates, flexible pricing policies are applied depending on the region."

"No Salespeople, No Advertising" Reducing Marketing Costs to Create a Virtuous Cycle of R&D Investment

Another reason Tesla is recognized in the Korean market is its unique sales method. Tesla has no salespeople or offline stores. All purchases are made online, and instead, a referral system is applied to expand sales through word-of-mouth from existing Tesla buyers. By boldly reducing costs for sales staff, store operations, and advertising marketing, Tesla focuses on product development and production.

Instead, Tesla CEO Elon Musk continuously communicates with the public through social media, creating brand buzz. Recently, as the Model 3, which is approaching a cumulative 8,000 units, has been released on Korean roads, its distinctive exterior design has naturally induced promotional effects. This strategy is analyzed to have targeted young Korean consumers who are accustomed to online non-face-to-face purchases and are interested in viral marketing.

Elon Musk, Tesla CEO, unveiling the Model 3 (Photo by AP Yonhap News)

'Network Company' Tesla Changes the Paradigm of New Cars

Most Tesla owners cite the automatic wireless software update (OTA) function and Autopilot feature as reasons for choosing Tesla. In particular, Tesla has changed the concept of new cars through the OTA method. Unlike traditional vehicles that release new models every 3 to 5 years through facelifts and complete redesigns, Tesla allows drivers to experience new cars with added features through software updates.

Last year, Tesla developed the 3rd generation Full Self-Driving (FSD) feature, which can be wirelessly updated inside the vehicle via OTA by paying an additional software usage fee. Without changing the hardware (exterior design), purchasing one car allows continuous addition of new features. Samsung Securities researcher Lim Eun-young said, "Tesla’s emergence has completely changed the concept of electric vehicles," adding, "Electric vehicles are the foundation for sharing and autonomous driving, and Tesla should be seen not just as an electric vehicle company but as a network company."

Tesla Model 3

Tesla Proves Success in Korean Market, Next Challenge is Securing Charging Infrastructure and Service Network

Tesla Korea, which controls 30% of the domestic electric vehicle market, now faces the challenge of expanding charging facilities and service networks. Currently, there are 32 Tesla Supercharger (fast charging) stations installed in Korea, with over 180 stalls available for fast charging (taking about 50 minutes). For slow charging, the 'Destination Charging Station' operates around 400 wall connectors, but charging takes from 5 to 8 hours.

Tesla's Free Fast Charging Station 'Supercharger'

Tesla Korea operates two service centers in Gangseo, Seoul, and Bundang, Gyeonggi Province, and including authorized body shops, there are only five locations so far. Tesla Korea plans to open eight additional Superchargers last year and expand service centers in Busan and Seongnam within this year to expand charging and service networks. An industry insider said, "The industry is watching whether Tesla can expand its service network and charging services as quickly as its sales growth in Korea," adding, "Improving service quality as fast as growth is Tesla Korea’s next challenge."

This content was produced with the assistance of AI translation services.