 "Tesla sold only one car in South Korea last month, issues with EVs made in China to blame")
Tesla has encountered a massive setback in South Korea’s electric vehicle market as it managed to sell just one vehicle, a Model Y SUV, in January.
This marked Tesla’s worst month since July 2022, when the company recorded zero sales in the country.
Data from Carisyou, a Seoul-based research firm, and the Korean trade ministry revealed a significant decline in new EV registrations across all carmakers, with a staggering 80 per cent drop in January compared to December.
Several factors have contributed to the sluggish demand for EVs in South Korea, including rising interest rates and inflation, which have prompted consumers to tighten their spending.
Moreover, concerns surrounding battery fires and a lack of fast-charging infrastructure have dampened enthusiasm for electric vehicles.
Tesla, which enjoyed strong sales of its China-made Model Y in the country last year, experienced a notable reversal of fortunes in January.
According to Lee Hang-Koo, head of the Jeonbuk Institute of Automotive Convergence Technology, many early adopters have already purchased EVs, while mass-market consumers remain hesitant to make the switch.
Additionally, Tesla’s association with China has impacted its popularity, with some consumers expressing reservations about the quality of Chinese manufacturing.
Seasonal fluctuations in demand also play a role in Korea’s EV sales, with many buyers delaying purchases in January to await government subsidy announcements. Tesla acknowledged this trend, stating that consumers postponed EV purchases until subsidies were confirmed.
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View AllFurthermore, Tesla faces regulatory challenges in South Korea. In July 2023, the selling price of the China-made Model Y fell just below the threshold required to qualify for a full government subsidy.
However, recent changes in subsidy criteria for 2024 have further reduced subsidies for Tesla’s Model Y by half, posing additional hurdles for the company in the Korean market.
(With inputs from agencies)
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