Tesla and Polestar may crack the car market in South Korea

(Bloomberg) — The Ninth International Electric Vehicle Show was held in the island resort of Jeju, at the forefront of South Korea’s green ambitions, earlier this month and served up several interesting takeaways.

The fair was Jeju’s first major public event since the epidemic, but it was still smaller than expected, with only 65 companies participating. Some, like Hyundai, were conspicuous by their absence – odd considering that Hyundai and the Kia subsidiary account for just over two out of every three cars sold in Korea.

However, the Seogwipo International Convention Center was bustling with business executives, young couples, families, and even a group of middle-aged tourists in hiking gear who looked like they might have stopped before climbing nearby Mt. Hallasan. About 30,000 people flocked to the four-day event, demonstrating the growing demand for electric vehicles in Korea – one of only two countries in the world where more than 100,000 new electric vehicles were registered in 2021 (the other was Norway).

There has also been interest in looking beyond local champions such as the Hyundai Ioniq and Kia Niro range. Price is probably a significant factor – each retails for at least $40,000, even after taking government subsidies into account.

What surprised me was that there were more old people and young women than I expected. An older couple test drive an $8,000 two-seater electric car from Korean startup MEV, while two 20-year-olds try to master a bright orange three-wheeled car made by Carver.

The star of the show was of course Tesla, who was making her first appearance on the show. While the EV pioneers booth was low on, the crowd flocked to check out the Model Y and Model 3 on display. With six outlets in Korea, Tesla became the fourth-largest foreign car maker in the famous narrow market in 2021 with sales of 17,826 vehicles, surpassing Volkswagen and Volvo.

Polestar, which opened its first showroom in Seoul in December, was also a darling of visitors. The outdoor display was as big as Tesla, showing off the Polestar 2. This was the best-selling foreign model in April, with about 460 units shipped, according to the Sweden-based company.

Electric scooters dominated the first floor. Two-wheeled vehicles occupy a gray area in South Korea. While it’s not uncommon to see electric scooters plying in bike lanes, electric scooters are currently prohibited from using EV charging stations, an inconvenience that dampens their appeal. Perhaps this is why Samsung SDI offered a battery replacement station next to motorcycles with their own cells.

The most interesting item on display was the $120,000 KSV electric camper boat. Part caravan (comes complete with kitchen, shower room, bed and TV and can be parked on the floor) and part boat, at a distance of 60 kilometers from its two 30 kWh batteries, has attracted a lot of curious onlookers.

My takeaway from the show: The electric car market in Korea will continue to grow, and there is an opportunity for foreign automakers like Tesla and Polestar to make headway in the country’s narrow car market.

© Bloomberg LP 2022


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