Elon Musk, CEO of Tesla, posted on social media a note expressing surprise that Tesla's Model Y, a midsize sport utility vehicle (SUV), is creating a sensation in the Korean market, drawing interest in the background. In the finished car industry, some interpret it as a "public check pitch" aimed at Hyundai Motor, which is emerging as Tesla's biggest rival not only in automobiles but also in artificial intelligence (AI) and robots.
◇ "Rivals" Model Y becomes the bestselling car in Hyundai Motor's home market
According to the import car industry on the 11th, Musk on the 8th (local time) shared on his X account a post about the popularity of the Model Y in Korea, praising, "Korea is awesome." The shared post included a photo of a white Model Y and the Taegeukgi, and Musk also attached Taegeukgi images to both sides of his own post, signaling keen interest in Korea.
According to the Korea Automobile Importers & Distributors Association (KAIDA), 8,762 units of the Model Y were sold in the domestic market last month, a 40.5% surge from a year earlier. Notably, for the first time ever, an import car topped monthly sales for a single model, beating Hyundai Motor and Kia, drawing attention.
The Model Y currently sold in Korea is the facelifted "Juniper" model launched in Apr. last year. In Apr., Tesla also released the Model Y L (long body), a six-seater that extends the wheelbase (the distance between the centers of the front and rear wheels) from the existing five-seater and adds a third row. By enlarging the body and boosting functionality, the Model Y L has absorbed demand for popular domestic SUVs such as the Sorento, significantly contributing to Tesla's market share expansion.
Many expect Model Y sales to keep climbing in the second half. That is because the Model Y Standard, which trims convenience features and lowers the price from the current mainstay Model Y Premium, is set to launch. Tesla is reportedly rushing the Model Y Standard launch to "counter" the entry of Chinese brand Zeekr into Korea.
In the finished car industry, the consensus is that if the Model Y equipped with Tesla's Full Self-Driving (FSD) technology enters the domestic market, Hyundai Motor and Kia will find it even harder to compete with Tesla. The Model Y currently sold in Korea is made in China, so the FSD function cannot be activated. If Tesla decides to send U.S.-made Model Y units to Korea, the FSD function can be used.
◇ Hyundai Motor forges an alliance with Nvidia to target Autonomous Driving and robot markets, pressuring Tesla
In the auto industry, Musk's latest X post is seen as intended to underscore that Tesla, including the Model Y, has swept the Korean market, effectively the "home turf" of Hyundai Motor and Kia. It reflects a checking mindset toward Hyundai Motor and Kia, which compete with Tesla on multiple fronts.
In fact, competition between Hyundai Motor and Kia and Tesla in the global EV market is heating up. While Germany has struggled to secure EV technology and Japan has focused on developing hybrids, Hyundai Motor and Kia have concentrated on electrification from early on.
As a result, Hyundai Motor and Kia are now regarded as among the few automakers outside China that can be compared with Tesla. If the premium brand Genesis is added to Hyundai Motor and Kia, their EV lineup is actually broader than Tesla's. In addition, Hyundai Motor Group, which has numerous parts affiliates, has built a robust vertically integrated value chain.
Tesla is particularly wary that Hyundai Motor Group has recently teamed up with Nvidia and is rapidly elevating its technology level in both full self-driving and physical AI.
Tesla has already commercialized a mature FSD technology. By contrast, Hyundai Motor and Kia have not yet secured full self-driving technology. Early this year, Hyundai Motor Group recruited Park Min-woo, formerly of Nvidia, as the new head of the AVP division and CEO of 42dot, reorganizing its lineup.
In an interview with an in-house outlet on the 10th, Park said, "We will run a two-track strategy of global collaboration and in-house technology development to enhance our autonomous driving competitiveness." In the finished car industry, there is speculation that he will lead Hyundai Motor to work closely with Nvidia in autonomous driving. If Hyundai Motor's finished car technology and data are combined with Nvidia's AI technology, development of highly advanced full self-driving could be achieved.
The two companies are also likely to wage fierce competition in robots. Tesla is expanding investment in physical AI, including developing the humanoid robot "Optimus." Hyundai Motor Group acquired U.S. robot maker Boston Dynamics in 2020 and proved its prowess by unveiling the humanoid robot "Atlas" early this year. It has also recently formed an alliance with Nvidia to further accelerate technological advancement in physical AI, including robots.
Nvidia CEO Jensen Huang visited Korea this month for two separate one-on-one meetings, including a private meal with Hyundai Motor Group Chairman Chung Eui-sun and a visit to the Seoul, Yangjae-dong headquarters. He also expressed an intention to participate in the AI Valley that Hyundai Motor plans to build in Saemangeum, North Jeolla.
A finished car industry source said, "In the autonomous driving and AI markets, Nvidia focuses on hardware and expanding an open platform, while Tesla competes with a strategy of in-house development across the entire stack, from chips and software to the finished product," adding, "the alliance between Nvidia and Hyundai Motor will loom as a huge threat to CEO Musk going forward."