EV adoption in South Korea has slowed due to concerns about battery fires and a lack of charging infrastructure. Chris Jung—NurPhoto via Getty Images
Tesla sold just one electric car in South Korea in January, as a number of headwinds weighed on demand, from safety concerns to price to a lack of charging infrastructure.
Sales of the company’s standalone SUV, the Model Y, will drop by July 2022, when the Austin, Texas-based automaker sold no vehicles at all, according to data from Seoul-based researcher Karisho and the South Korean Ministry of Trade. It was the worst month since March. According to data from Carisyou, the number of new EVs registered in South Korea in January decreased by 80% from December across automakers.
In South Korea, automakers are facing slowing enthusiasm for EVs as rising interest rates and inflation cause consumers to cut back on spending, while concerns about battery fires and fast charger shortages also dampen demand. Tesla’s sales slump in January signals a major shift for the brand, whose Chinese-made Model Y was one of its best-selling products last year.
Lee Hankoo, director of the Jeonbuk Automobile Fusion Technology Research Institute, said that while many early adopters have already purchased EVs, mass-market consumers have not yet made the move. He said Tesla’s popularity is also being hurt by its relationship with China.
“Most Koreans who want to buy Tesla cars have already done so,” Lee said. He said consumers are concerned about manufacturing quality, and “recently we’ve seen that some Teslas are made in China, so some people don’t like Teslas.”
EV sales in South Korea are also affected by large seasonal fluctuations in demand. Lee said many people avoid buying a car in January because they want to wait for government subsidies to be announced.
A Tesla South Korea spokesperson said in a statement to Bloomberg News that consumers delayed purchasing EVs before confirming the subsidy.
Tesla faces headwinds there, too. In July 2023, the company set the selling price of the China-made Model Y at 56.99 million won ($43,000), below the 57 million won threshold for full government subsidies.
The 2024 plan announced on Tuesday lowers the level to 55 million won, cutting subsidies for Tesla’s Model Y in half.