Passenger electric cars sold in Korea in the first quarter rose 153% from a year earlier. As imported EVs drove the increase, with Tesla recording monthly sales of 10,000 units, Hyundai Motor and Kia also posted a record high in EV sales.
This is the result of EV subsidies being finalized earlier than last year and the impact of high oil prices stemming from the Iran war. In addition, with subsidy-related budgets included in the supplementary budget bill at the National Assembly, EV adoption is expected to become more active this year.
According to Kaizuyu Data Research Institute on the 8th, first-quarter domestic passenger EV sales totaled 72,321 units. That is a surge of 153% from 28,547 units in the first quarter of last year, marking the highest quarterly sales ever.
First-quarter passenger EV sales jumped from 6,281 units in 2021 to 19,087 in 2022, then showed a gradual increase to 19,154 in 2023 and 20,791 in 2024. Last year's annual EV registrations were 220,177.
The auto industry believes earlier-than-usual finalization of EV subsidies, a 1 million won transition grant, and aggressive EV discount campaigns by each company lit the spark, while soaring gasoline prices due to the aftermath of the Iran war also boosted sales.
Looking at this year's monthly sales, passenger EV sales in January, when EV subsidies were finalized, were 5,528 units. But when Tesla, Hyundai Motor, and Kia front-loaded broad discount policies in February, sales rose to 29,689. With fuel prices surging, March sales climbed further to 37,104.
Tesla's Model Y was No. 1 in the first-quarter domestic market. Model Y sales were 15,325 units, up 587% from a year earlier (2,229 units). Kia's EV3 ranked second with 7,832 units. EV3 sales increased 54% from the same period a year earlier (5,065 units).
Third place went to the EV5 with 6,306 units sold. Next, Hyundai Motor's Ioniq 5 ranked fourth with 5,334, and Tesla's Model 3 ranked fifth with 4,550. Ioniq 5 increased 110%, and Tesla's Model 3 rose 85%.
In particular, both domestic and imported midsize and compact segments were popular. In terms of price, models sold in the 30 million won range for domestic brands and the 40 million won range for imports were favored by consumers. Tesla's Model Y Premium Long Range saw its price cut to 49.99 million won in Dec. last year. With various subsidies this year, the actual purchase price is around 47 million won.
The Model 3 had its price cut to 41.99 million won in Jan., and with subsidies, it can be purchased in the 30 million won range. Under Hyundai Motor and Kia's discount policies, the EV3 sold in the 32 million won range, the EV5 in the 34 million won range, and the Ioniq 5 in the 46 million won range.
An auto industry official said, "EV prices have entered an adjustment phase," adding, "As current EV prices appear to have broken consumers' psychological barrier, how appealing each brand's offerings are at this price point will be the key factor in consumer choice going forward."
On top of that, the strong likelihood of an additional allocation of EV subsidy budgets is another factor that will further lift EV sales. That is because the supplementary budget bill to respond to the Middle East war includes funding related to EV deployment.
The National Assembly's Environment and Labor Committee on Climate and Energy approved a revised supplementary budget bill including 230 billion won for zero-emission vehicle deployment, such as EVs, at a full meeting on the 7th. Due to the rapid increase in sales and EV transition grants, more than 60% of this year's subsidies have already been exhausted.
New model launches are also on deck. The Model YL, a six-seat version of Tesla's Model Y, is set to be released soon, and Chinese EV brand Zeekr plans to launch the midsize sport utility vehicle (SUV) 7X with premium options. With EV demand rising domestically, attention is on whether Hyundai Motor and Kia will roll out new models, including model-year changes, in response.
Meanwhile, Kwon O-chan, senior official at the Korea Automobile & Mobility Association (KAMA) Future Mobility for Eco-Friendly Vehicles Office, said in a report on the 30th of last month, "The market is showing signs of recovery, but to achieve the mid- to long-term deployment goal of 4.2 million units by 2030, subsidies need to be operated consistently and strengthened."