Domestic Electric Passenger Car Sales Down 2.7% in First Half... Tesla's Market Share at 43%

Korea Automobile Manufacturers Association 'Electric Vehicle and Hydrogen Vehicle Sales Trends in the First Half of This Year' Report
Electric Cargo Vehicle and Bus Sales Surge... Growth of Chinese Electric Buses Also 'Noteworthy'

Tesla Model 3

[Asia Economy Reporter Kim Ji-hee] Sales of electric passenger cars in the first half of this year decreased by 2.7% compared to last year. While sales of domestic cars nearly halved, imported car sales surged more than sixfold, significantly narrowing the market share gap in the domestic electric vehicle market. In particular, American Tesla, led by the Model 3, accounted for 43% of the electric passenger car market share in the first half of this year.

According to the "2020 First Half Electric Vehicle and Hydrogen Vehicle Sales Trends" report released by the Korea Automobile Manufacturers Association on the 26th, 22,267 electric vehicles were sold in the first half of this year, a 23% increase from the previous year. However, sales of electric passenger cars during the same period actually decreased by 2.7% to 16,359 units. Domestic brands saw a sharp decline of 43.1% year-on-year due to reduced subsidies per vehicle, abolition of subsidies for private slow chargers, and delays in new model launches, while imported cars increased by 564.1% thanks to new model sales.

Especially notable is Tesla. Tesla's sales grew explosively by 1,587.8% year-on-year due to the full-scale introduction of the Model 3. Tesla sold 7,080 units in the first half of this year and is estimated to have received subsidies worth about 90 billion KRW.

Electric Vehicle Distribution Status by Model (Photo by Korea Automobile Manufacturers Association)

Unlike passenger cars, electric commercial vehicles performed strongly in the first half. It is analyzed that sales exploded due to the release of competitively priced and high-performance mass-produced models and benefits such as freight transport business permits. In the first half of this year alone, 5,031 units were sold, accounting for 91.5% of the annual subsidy scale. Electric buses also increased by 64.5% year-on-year to 181 units, supported by local governments' policies to switch to eco-friendly buses.

By company, domestic automakers sold 14,563 electric vehicles, down 13.7% from the previous year. Accordingly, their market share dropped from 93.2% last year to 65.1%. Despite the explosive growth of electric commercial vehicles, Hyundai Motor Company’s overall electric vehicle sales decreased by 2.9% due to a decline in passenger car sales. Kia Motors also saw a 23.7% decrease in total sales year-on-year as passenger car sales shrank by 54.6%.

Most manufacturers showed growth in electric vans compared to last year. Particularly, the growth of Chinese bus sales stands out. As Chinese bus sales more than doubled year-on-year, the market share of Chinese-made electric buses rose from 30.9% last year to 38.7% in the first half of this year. It is estimated that they received 35.1% (5.9 billion KRW) of the total electric bus subsidies.

On the other hand, countries like France and Germany have supported their domestic companies by focusing subsidy policies on vehicle types where their domestic firms have competitive advantages or concentrate capabilities. According to the association, these countries have strengthened such policies through subsidy reforms after the COVID-19 pandemic.

In May, France temporarily increased subsidies for electric vehicles priced under 45,000 euros to 7,000 euros and decided to provide subsidies for PHEV models, which had previously been excluded from subsidies, through subsidy reforms. As a result, French company PSA, which had not received subsidies before, became eligible for subsidy benefits.

Jung Man-ki, chairman of the Korea Automobile Manufacturers Association, pointed out, "The spread of electric vehicles is greatly influenced not only by vehicle performance but also by subsidy policies," adding, "Considering that subsidies are funded by taxpayers' money and that countries like France and Germany design subsidy systems favoring their domestic companies, our government also needs to improve the subsidy system."

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