Domestic Market Shaken by Chinese Car Surge... Import Car Landscape Also Transformed

EV Sales Surge by 113.6%,
Market Share Expands to 23.3%

Chinese Imports Surpass Germany,
Becoming No.1 by Country of Manufacture

In the first half of this year, eco-friendly vehicles accounted for more than half of all new car sales in the South Korean automotive market for the first time ever. On the surface, this signifies a full-fledged shift toward electrification; however, underlying this trend is a sharp expansion of Chinese-made electric vehicles (EVs) in the market.

According to the Korea Automobile & Mobility Association (KAMA), new car registrations in South Korea reached 850,636 units in the first half of this year, representing a 1.3% increase compared to the previous year. Among these, the share of eco-friendly vehicles—including hybrids, electric vehicles, and hydrogen vehicles—rose to 57.8%. In particular, battery electric vehicles (BEVs) surged to 198,509 units, up 113.6%, leading the overall market growth.

BYD Sirion. BYD

China was at the center of this EV market expansion.

Explosive growth in sales of Chinese-made EVs followed a significant increase in supply from Tesla's Shanghai Gigafactory, which produces the Model Y and Model 3, combined with the aggressive pricing strategy and frequent new model launches from BYD, which entered the South Korean market last year. The presence of Chinese-made vehicles was further strengthened by the inclusion of global brands such as Polestar 4 and Volvo, both produced in China.

Indeed, new registrations of Chinese-made EVs in the first half of the year totaled 69,513 units, an increase of 178.7% compared to the same period last year. Their share in the domestic EV market also expanded to 35%. Imported electric vehicles as a whole increased by 151.9%.

KAMA identified the sharp growth in EVs during the first half of 2026 as being mainly driven by the introduction of the "EV Transition Incentive," the early execution of subsidies by local governments, and high global oil prices. Each of these policy-driven and external factors played a major role. Additionally, KAMA analyzed that the rapid increase in sales of Chinese-made Tesla models and BYD vehicles was the most significant contributing factor.

This trend has even reshaped the dynamics of the imported car market by country of origin.

New registrations of imported cars during the first half of the year totaled 192,703 units, an increase of 30%, while the share of Chinese-made vehicles, based on the manufacturing country, climbed to 41.2%. This marks the first time that Chinese vehicles have overtaken German cars, whose share fell out of the top spot. Just last year, the share for China was 23.5% and Germany 40.3%, but within a single year, their ranks have completely reversed. Imports of Chinese vehicles soared by 127.8%, while German imports declined by 3%.

The competition among brands is also changing. BYD's domestic EV sales for the first half reached 11,667 units, an increase of 772.7% from the previous year, immediately propelling the company to fourth place in EV sales. Tesla, leveraging its China-manufactured models, sold 56,136 units for 192.5% growth and ranked second after Kia.

KAMA noted that while the expansion of Chinese vehicles has provided positive effects for consumers by intensifying price competition and increasing choices, it could also significantly strain South Korea's domestic manufacturing base and parts supply chain. As major countries strengthen policies to protect their own automotive industries, KAMA recommended that South Korea adopt policies to enhance industrial competitiveness beyond subsidy-based measures—such as introducing a "Domestic Production Promotion Tax Scheme" supporting domestic manufacturing and expanding charging infrastructure.

Jung Dae-jin, President of KAMA, pointed out, "With the aggressive inroads of Chinese-made EVs accelerating not just in global markets but also in our domestic market, the manufacturing base and supply chain competitiveness of South Korea's automotive industry are facing a serious threat." He emphasized, "To overcome this transitional crisis, it is necessary to include EVs in the 'Domestic Production Promotion Tax Scheme' to enhance the competitiveness of the entire domestic production infrastructure and ecosystem."

This content was produced with the assistance of AI translation services.