Last month, Tesla sharply cut prices of its main sellers, the Model Y and Model 3, putting Hyundai Motor and Kia on high alert to defend the domestic EV market. On top of that, Chinese EV makers, including BYD, which entered the Korea market last year, plan to roll out new models in succession this year, likely deepening Hyundai Motor and Kia's worries.
According to Kaizuyu Data Research Institute on the 16th, Hyundai Motor and Kia's combined EV sales (including passenger, commercial and hydrogen electric) last year totaled 121,010 units. That is up 73.5% from the previous year's 69,738 units and is the highest result since Hyundai Motor and Kia began selling EVs.
By model type, Hyundai Motor sold 46,400 passenger cars and 13,943 commercial vehicles. Kia sold 53,085 passenger cars and 7,582 commercial vehicles.
For Hyundai Motor, the IONIQ 5, a compact SUV, sold 14,455 units, the most among single models. It was followed by the Porter commercial vehicle with 9,296 units, the Casper Electric (8,856 units) and the IONIQ 9 (8,208 units).
For Kia, the EV3, a small SUV, was the top seller with 21,252 units. It was followed by the EV6 (9,358 units), Ray (9,276 units) and EV4 (8,058 units).
However, in the finished-car industry, the view is that while Hyundai Motor and Kia showed strong growth in overall sales, they fell short of expected sales in the domestic market amid Tesla's surge.
According to the Korea Automobile Importers & Distributors Association (KAIDA), Tesla sold 59,916 passenger cars in Korea last year. Even the Cybertruck, which sold 352 units, is classified as a passenger model for Tesla. Tesla's sales in the domestic electric passenger car market outpaced Hyundai Motor and Kia. In particular, the Model Y posted sales of 50,398 units last year, helped by the launch of the Juniper facelift.
Tesla's sales are likely to increase further this year. That is because the price cuts implemented on the 31st of last month are drawing EV demand.
Tesla Korea cut the price of the Model Y Premium Long Range AWD from 63.14 million won to 59.99 million won by 3.15 million won, and the Model Y Premium RWD from 52.99 million won to 49.99 million won by 3 million won. The Model 3 Performance AWD price was slashed from 69.39 million won to 59.99 million won, a discount of 9.4 million won.
Including this year's confirmed national subsidies, Tesla's prices fall further. This year's national subsidies for the Tesla Model 3 are 2 million won. Local subsidies have not been finalized yet, but if calculated at last year's level (200,000 won), buyers would receive about 2.2 million won in subsidies. For the Model Y Premium RWD, if you add local subsidies to the 1.7 million won national subsidies, it can be bought in the high-40 million won range. In addition, switching from an internal combustion vehicle to an EV brings an extra 1 million won in support.
Because of this, the imported-car industry says Tesla decided on a surprise price cut early to lock in EV buyers ahead of the annual EV subsidies calculation finalized at the start of each year.
Hyundai Motor and Kia are also locked in tough competition with Chinese EV makers. BYD entered the Korea market last year and launched three models: the Atto 3 small SUV, the Seal midsize sedan and the Sea Lion 7 midsize SUV. In addition, the small hatchback Dolphin is slated for release this year.
This year's national subsidies for BYD EVs are set at 1.26 million won for the Atto 3, 1.09 million–1.32 million won for the Dolphin, 1.69 million won for the Seal and 1.52 million won for the Sea Lion 7. Local subsidies are not finalized yet, but considering the Seoul standard was 200,000 won last year, the Atto 3's price in Seoul this year is expected to be in the low-30 million won range. The Dolphin's price is not yet set, but given it touts value for money, forecasts call for a launch in the low-20 million won range.
Also this year, Zeekr, the premium brand of Geely Automobile Holdings, plans to begin sales in Korea. The 7X midsize electric SUV is expected to be the first model to arrive.
Hyundai Motor and Kia are responding to offensives from Tesla and BYD by discounting prices on their main models. For the Kia EV3 long range, combining 5.55 million won in national subsidies with local subsidies and Kia's discount puts the purchase price in the high-30 million to low-40 million won range.
For the IONIQ 6, national subsidies are 5.7 million won. Adding Hyundai Motor's own discount program (1 million–5.5 million won) and the EV transition support brings the maximum discount to 12.2 million won. Based on the IONIQ 6 long range, it can be purchased in the mid-40 million won range. The IONIQ 5 is also expected to be in the mid-40 million won range.
So far, the prices of Hyundai Motor and Kia's main EVs are cheaper than comparable Tesla models, but the difference does not exceed 10 million won. Because of this, many in the finished-car industry say Hyundai Motor and Kia should consider more aggressive discounts to capture new EV buyers.
Some argue that Hyundai Motor and Kia need to broaden their EV lineup further. For Hyundai Motor, three dedicated EV models are sold: the IONIQ 5, IONIQ 6 and IONIQ 9. The IONIQ 3 small SUV remains at the conceptual stage.
A finished-car industry official said, "Of the new models Hyundai Motor is launching this year, most are hybrid and plug-in hybrid models, so there is a greater chance it will face more difficulties competing in the EV market with Tesla and BYD."