A BYD Dolphin Mini electric vehicle, left, and a Yuan Pro are displayed during the launch event of Chinese EV maker BYD in Buenos Aires, Argentina, on Oct. 8, 2025. [REUTERS/YONHAP]

 
Chinese-made EVs are gaining ground in Korea, accounting for one in every three EVs sold in the country last year. 
 
They accounted for 33.9 percent of newly registered electric vehicles in Korea last year, up from just 1.1 percent in 2021, according to data released Thursday by the Korea Automobile and Mobility Association. EVs made in Korea, meanwhile, fell from 74.1 percent to 57.2 percent over the same period. 
 
 
Chinese-made vehicles made up 30.9 percent of all EV registrations in the first quarter of this year.
 
Much of the growth has been driven by Tesla, which manufactures its vehicles in Shanghai. But Chinese brands themselves are increasingly making their mark as well. BYD sold 5,991 EVs in Korea between January and April this year, according to the Ministry of Trade, Industry and Energy — 10 times the figure from the same period last year. Its flagship models, the Sealion 7 and Atto 3, are priced several million won below comparable Korean competitors. Other Chinese brands, including Zeekr and Xpeng are also preparing to enter the Korean market. 
 
“We thought fixed stereotypes about Chinese EVs would make it hard for them to succeed, but they’ve grown rapidly, particularly as second cars,” said one industry insider. “If premium brands like Zeekr come in, it could become even harder to respond.”
 
Other countries have responded to the Chinese EV surge with significant trade barriers. The United States, for instance, imposes an additional 100 percent tariff on Chinese-made EVs. The European Union levies company-specific surcharges of 17 percent to 35.3 percent on top of its base tariff rate, meaning buyers in Europe can face taxes of up to 45.3 percent on Chinese EVs.
 
In Japan, its EVs and select Tesla models are eligible for subsidies of up to 1.27 million yen ($7,900), while BYD vehicles receive only around 150,000 yen. Japan also offers a tax credit of 400,000 yen per domestically produced EV through its strategic domestic production incentive program.
 
They are acting on the concern that rising Chinese market share could destabilize not just their automakers but entire industrial ecosystems, including batteries, components and supply chains, experts say.
 

Visitors check a BYD Seagull EV displayed at the Beijing International Automotive Exhibition, or Auto China, in Beijing on April 26. [REUTERS/YONHAP]

 
Korea, by contrast, just has an 8 percent tariff. The option of implementing additional tariffs designed to offset foreign government subsidies has been floated, but a likely Chinese trade retaliation has made it politically difficult. Existing EV subsidies do favor domestic manufacturers, but the price gap with Chinese brands is wide enough that the difference in subsidy levels is not enough to offset it, according to industry figures.
 
“BYD’s price competitiveness is so strong that even in the EU, where it faces relatively lower tariffs compared to other Chinese brands, its sales are surging,” said Cho Chuel, a senior researcher at the Korea Institute for Industrial Economics and Trade. “At current subsidy levels, Korea will find it difficult to hold the line against the Chinese EV offensive.”
 
The domestic EV industry is now pinning its hopes on a Korean equivalent of the U.S. Inflation Reduction Act, expected to be announced as part of a tax reform package in July. The proposed domestic production incentive would offer corporate tax deductions for products manufactured and sold in Korea, covering sectors, including semiconductors, secondary batteries, displays and electric vehicles. 
 
The Ministry of Trade, Industry and Resources is set to formally recommend to the Ministry of Finance and Economy that EVs be included in the program. 
 
“If the incentive is applied to finished vehicles, it would boost domestic EV demand and have a positive ripple effect on the battery industry as well,” said Oh Moon-sung, chairman of the Korean Tax Policy Association.

BY AHN HYO-SEONG  [[email protected]]