Tesla faced a chilly reception in the South Korean market in January, selling only one Model Y, according to Bloomberg. This performance was only slightly better than July 2022 when no vehicles were sold. The main reasons for the sluggish sales were attributed to factors such as inflation concerns, battery safety worries, and a lack of charging infrastructure.
Public data reveals that not only Tesla but all automakers experienced an 80% month-on-month decrease in new electric vehicle deliveries in South Korea in January. Analysts suggest that as interest rates and inflation rise in South Korea, many consumers are cutting back on spending, reducing demand for bulk purchases including electric vehicles. Additionally, many still harbor concerns about battery safety, and the construction of fast-charging stations in South Korea remains suboptimal, suppressing public demand for electric vehicles for various reasons.
On the other hand, consumer demand for electric vehicles in South Korea is also influenced by subsidy policies. Many consumers avoid purchasing cars in January as the government's latest annual subsidy policies have yet to be announced, and consumers prefer to wait until the subsidy policies are confirmed before making purchases.
Adding to the woes, Tesla's prospects for receiving government subsidies in South Korea are not optimistic either: In July 2023, in order to qualify for full government subsidies, Tesla priced the Model Y at 56.99 million Korean won (approximately 308,300 yuan). However, according to the subsidy plan announced by the South Korean government on February 6, 2024, the subsidy standard continues to decline to 55 million Korean won, which means that subsidies for Tesla's Model Y may be halved, further adversely affecting sales.
