China's BYD, which was cut from the government's electric vehicle national subsidies program, has pulled out a "head-on breakthrough" card by setting up its own subsidies equal to the national subsidies. The move is the exact opposite of Tesla Korea, which hiked vehicle prices by up to 7 million won without notice as soon as it was selected for subsidies. With first-half sales this year surging more than 800% from a year earlier and running hot, the strategy appears to be to fully absorb the price-hike factor and keep the steep uptrend going.
According to the imported car industry on the 3rd, BYD Korea will run an "eco-friendly zero-emission vehicle customer support program" this month that independently provides the same amount as the existing national subsidies. This comes after the Ministry of Climate, Energy and Environment released the list of electric vehicle purchase subsidies recipients on the 30th, excluding BYD, which halted the national subsidies from the 1st.
As a result, the actual purchase price of BYD vehicles perceived by consumers remains the same as before. For the flagship midsize sport utility vehicle (SUV) "Sea Lion 7," BYD Korea will fully cover 1.52 million won, the previous national subsidies amount. The midsize sedan "Seal" will also get 1.69 million won for the rear-wheel-drive model and 1.51 million won for the all-wheel-drive model, and the subcompact hatchback "Dolphin" will see a price cut effect of 1.09 million won intact.
Since being dropped from the national subsidies program, BYD Korea has weighed whether to provide its own subsidies. While it did offer its own subsidies last year, when it was early in its Korea market entry, circumstances have changed. Domestic consumer perceptions of BYD's value for money and technology have improved, and with base vehicle prices themselves lower than rivals, some expected the impact of losing subsidies to be limited.
Even so, BYD Korea's decision to shoulder a large funding burden and set up its own subsidies is seen as a strong intent not to miss the "golden time" for establishing itself in the Korea market. According to the Korea Automobile Importers & Distributors Association (KAIDA), BYD's domestic sales from January to June this year totaled 11,675 units, up 807.9% from the same period a year earlier. An imported car industry official said, "It's essentially a defense to prevent a short-term psychological resistance line from the subsidies gap from putting the brakes on growth."
BYD Korea's move also contrasts with Tesla Korea. Although Tesla Korea was selected for national subsidies, it abruptly raised prices of major models by up to 7 million won on the 1st, the day after the announcement. A BYD Korea official said, "We will continue to prepare various support measures so that customers can experience BYD's electrification technology under more reasonable conditions."