Tesla and BYD Drive Sales in Korea... Imports of Chinese Auto Parts Hit All-Time High

Auto Parts Imports Reach $1.439 Billion in H1 2026
Up 15.3% Year-on-Year... Highest First-Half Record
Rising Popularity of Chinese-Made Vehicles like Tesla and BYD
Growing Dependence on Chinese Parts Threatens Domestic Suppliers

The expansion of Chinese cars into the Korean market is rapidly spreading from finished vehicles to batteries and auto parts. Following the rise of Chinese-made electric vehicles accounting for one out of every three electric cars in the domestic EV market, imports of Chinese auto parts have also surged to record highs. Experts say this is evidence that China is leveraging its competitive edge across the entire automotive supply chain—from batteries to parts to finished vehicles—to penetrate the Korean market.

Tesla Model Y. Tesla Korea homepage

Auto Parts Imports Surge 50% in 5 Years... All-Time High Expected This Year

According to trade statistics from the Korea International Trade Association as of August 13, imports of Chinese auto parts in the first half of this year amounted to $1.43905 billion. This figure is up by 15.3% from $1.24794 billion in the same period last year. Chinese-made products accounted for an overwhelming 53.8% of all auto parts imports during this period, ranking first by a wide margin.

Imports of Chinese auto parts have been increasing sharply every year. From $1.7 billion in 2021, the figure skyrocketed to $2.477 billion in 2025—a jump of about 45%. The pace of growth accelerated further this year, and at this rate, imports of Chinese auto parts are expected to reach an all-time high in 2026.

The increase in Chinese parts imports is closely aligned with the growing influence of Chinese vehicles in the finished car market.

According to the Korea Automobile and Mobility Association (KAMA), newly registered Chinese-made electric vehicles in Korea in the first half of this year reached 69,513 units—a 178.7% surge compared to the same period last year. Chinese vehicles made up 35.0% of all newly registered EVs, which means that more than one in three electric cars sold in Korea is produced in China.

Chinese-made vehicles, centered around electric models, are also rapidly expanding their presence in the domestic imported car market. In the first half of this year, 79,444 Chinese imports were registered—a 127.8% increase year-on-year. By country of manufacture, the market share for Chinese vehicles hit 41.2%, overtaking Germany for the top spot. Compared to the 23.5% share in the first half of last year, Chinese vehicles’ share expanded by 17.7 percentage points in just one year.

The domestic penetration of Chinese electric cars has been driven by Chinese-manufactured models from Tesla and brands such as BYD. Tesla Model Y and Model 3 vehicles produced at the company’s Shanghai Gigafactory have been imported to Korea in large quantities, while budget electric vehicles from BYD and other China-based models like Polestar are also expanding their sales in the local market.

Stability of Domestic Parts Suppliers at Risk

There are growing concerns that the surge in Chinese parts imports could negatively affect the ecosystem of Korea’s domestic parts suppliers.

Most domestic parts suppliers are highly dependent on the local market. However, sales of finished vehicles from domestic carmakers are on a downward trend in Korea. On top of that, these suppliers have not kept pace with the transition to electrification, leading to an increased reliance on Chinese parts.

For instance, last July, Tesla’s Model Y, produced at the Shanghai Gigafactory, overtook Korea’s top-selling The New Grandeur to become the best-selling vehicle in the country. According to an official statement by Tesla, cars produced at the Shanghai Gigafactory source parts from more than 400 local suppliers in China. The proportion of locally sourced Chinese parts reaches 95%.

An auto repair shop owner in Seoul explained, "In the past, people chose Chinese OEM (original equipment manufacturer) parts to save on repair costs instead of domestic genuine parts. Now, with the increase in Chinese vehicles, Chinese parts are essentially the genuine parts for those cars, so we have no other choice but to import and use them."

The potential entry of Chinese parts manufacturers into Korea is another variable. China’s local parts companies, having scaled up through their domestic market, are now expanding into global OEM supply chains. The Korea Auto Industries Cooperative Association (KAICA) also assesses that competition between domestic suppliers and Chinese local parts makers is inevitably set to intensify as the latter continue to grow.

To strengthen the competitiveness of domestic parts manufacturers, the local auto industry has called for the introduction of a tax incentive for domestic production. However, the government recently excluded the automotive sector from its newly announced tax reform plan. The domestic production incentive tax is designed to provide corporate tax deductions based on domestic production and sales performance of strategic industry products.

An industry source commented, "Global auto brands are lowering prices by using Chinese parts, leaving only the brand shell. The domestic production incentive tax is not merely for the interests of large local conglomerates, but rather for the survival of our entire auto parts ecosystem. Its exclusion is regrettable. It’s time for a solution to protect the domestic auto parts industry."

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