It has become possible to buy the Model 3 Standard RWD (rear-wheel drive), Tesla's mass-market midsize sedan, for in the 30 million won range. As Tesla has continued a low-price offensive in the domestic market, including steep cuts to some models last month, Hyundai Motor and Kia, which need to defend their "home turf," are likely to face a bigger headache.
According to the finished car industry on the 18th, Tesla Korea recently posted domestic prices on its website of 41.99 million won for the Model 3 Standard RWD and 52.99 million won for the Premium Long Range RWD.
Because electric vehicles receive national subsidies and local government subsidies, they can be purchased for less than the posted prices. The national subsidies for the Model 3 Standard RWD and the Premium Long Range RWD were set at 1.68 million won and 4.2 million won, respectively. With local government subsidies added, the Model 3 Standard RWD can be purchased in the high-30 million won range.
In the finished car industry, some say Tesla has priced lower than expected, raising the likelihood that sales of comparable models from Hyundai Motor and Kia will be dampened.
The price of the Standard E Value Plus, the lowest trim of Hyundai Motor's Ioniq 5, a midsize electric sport utility vehicle (SUV), is 47.4 million won, which is 5.41 million won more expensive than the Model 3 Standard RWD. The lowest trim of Kia's EV5, a compact electric SUV, is 48.55 million won. The Model 3 Standard RWD's price is only a little over 1 million won higher than Kia's EV4, a compact sedan, whose lowest trim starts at 40.42 million won.
If Hyundai Motor and Kia sell their electric vehicles at current prices without discounts, the actual purchase price, even with national subsidies and local government subsidies added, would be similar to or even higher than the Model 3.
At the end of last month, Tesla also sharply cut prices for the popular Model 3 and the midsize SUV Model Y in Korea. At that time, the Model Y Premium Long Range AWD dropped by 3.15 million won to 59.99 million won from 63.14 million won, and the Model Y Premium RWD fell by 3 million won to 49.99 million won from 52.99 million won. The Model 3 Performance AWD plummeted by 9.4 million won to 59.99 million won from 69.39 million won.
Tesla's recent low-price push is seen as an attempt to bring in high-volume units produced at its China plant to expand market share domestically. Of the five models sold in Korea, the Model 3 and Model Y are made in China, while the large sedan Model S, the large SUV Model X, and the electric truck Cybertruck are produced in the United States and imported to Korea.
Hyundai Motor and Kia also face pressure from Chinese electric car makers that tout even lower prices than Tesla. BYD entered the domestic market last year and launched three models: the small SUV Atto 3, the midsize sedan Seal, and the midsize SUV Sealion 7. In addition, this year it plans to release the small hatchback Dolphin.
The national subsidies applied to BYD models were 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 Sealion 7. Although local government subsidies have not yet been finalized, considering last year's Seoul-level local subsidies, the actual purchase price of the Atto 3 in Seoul this year is expected to be in the low-30 million won range.
An official in the finished car industry said, "Looking only at the electric vehicle market, Tesla's products are seen as having an edge over Hyundai Motor and Kia in brand competitiveness, and they are also viewed as ahead in software performance and various upgrades," and added, "If Hyundai Motor and Kia want to defend domestic market share, they will need to consider deeper price cuts."