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Yeon Woo Lee

Electric vehicles (EVs) made in China now account for one in every three new registrations in South Korea, as Tesla’s Shanghai-built models power the surge and Chinese carmakers start to gain traction.
The country’s auto manufacturers have further room to expand, analysts said, supported by higher fuel prices linked to the US-Israeli war in Iran and looser restrictions than traditional target markets. Still, tightening subsidy regimes could slow the pace of expansion, they cautioned.
Sales of China-made EVs in South Korea soared to 25,000 units in the first quarter of 2026, marking a 286.1 per cent increase from a year earlier, according to data from the Korea Automobile and Mobility Association (Kaida). Over the same period, Korean carmakers sold about 51,000 units, but grew at a much slower pace of 126.1 per cent.
The market share of EVs manufactured in China surged from 4.7 per cent in 2022 to 33.9 per cent last year, while that of Korean EVs fell from 75 per cent to 57.2 per cent, according to the data released on Wednesday.
“Most [Chinese] firms have identified overseas expansion as a growth pillar of 2026, in light of slowing EV demand at home,” said Xu Tianchen, senior economist at the Economist Intelligence Unit. “South Korea is certainly one of the target markets.”
Chinese EV models exported to the country were initially concentrated in commercial vehicles such as buses, while passenger cars struggled to challenge the dominance of Hyundai Motor and other Korean brands.
As a leader in quality and affordability, Chinese brands are well placed to compete in Korea
Troy Stangarone, Carnegie Mellon Institute for Strategy and Technology
That began to change in 2024, as competitively priced, technologically advanced models expanded their presence. Yet the biggest driver of growth for China-made EVs in South Korea is not a Chinese brand but Tesla, whose Shanghai-built models have become increasingly popular, said Troy Stangarone, a non-resident fellow at the Carnegie Mellon Institute for Strategy and Technology.
Tesla sells its models in South Korea with slightly lower specifications – including a shorter driving range and smaller battery capacity than versions made in the United States – while cutting prices by as much as 10 million won (US$6,740).
The company’s sales jumped 311 per cent from 2022 to 2025 to 59,916 units, Stangarone said, citing Kaida data. It was also South Korea’s bestselling imported brand in the first quarter.
The market’s momentum, however, is no longer centred on Tesla alone. Chinese brand BYD has begun to outperform expectations, surpassing 10,000 cumulative sales in just 11 months from April last year – one of the fastest growth rates among imported brands – and now ranking fourth.
Following BYD’s entry, other Chinese EV makers – including Zeekr, Xpeng and Chery Automobile – are preparing to enter the market.
“As a leader in quality and affordability, Chinese brands are well placed to compete in Korea,” Stangarone said.
South Korea ranked as the eighth-largest market for Chinese EVs in 2025, according to energy think tank Ember, behind countries including Belgium, the United Kingdom, the United Arab Emirates and Australia.


The country offers room for growth, according to analysts, with fewer trade barriers than the US and Europe alongside rising demand from the Iran war and broader disruptions to energy markets.
The US imposes tariffs of more than 100 per cent on Chinese EVs, while the European Union has levied duties of up to 45 per cent. By contrast, South Korea’s tariff stands at just 8 per cent, with no major policy shift expected as bilateral ties warm, Xu said.
Still, policy support is set to become more conditional. From July 2026, carmakers will be assessed against seven criteria – including research and development (R&D) investment, job creation and localised component sourcing – with subsidies awarded only to those scoring 80 or above.
“The framework is likely to put Chinese manufacturers at a disadvantage, given their limited local R&D footprint and supply chain integration,” said Claire Yuan, director of corporate ratings at S&P Global Ratings.
Future market penetration could hinge on their willingness to invest in the country, she added.


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BYD is now one of Korea’s fastest-growing imported EV brands while rivals like Chery look to break into a market long dominated by local giants


BYD is now one of Korea’s fastest-growing imported EV brands while rivals like Chery look to break into a market long dominated by local giants.


Chinese EVs make inroads in South Korea, one of world’s most competitive auto markets

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}BYD is now one of Korea’s fastest-growing imported EV brands while rivals like Chery look to break into a market long dominated by local giants

BYD is now one of Korea’s fastest-growing imported EV brands while rivals like Chery look to break into a market long dominated by local giants