Tesla’s presence in South Korea hit a significant snag in January 2024, with sales plummeting to just a single Model Y SUV. This marked the company’s worst performance since July 2022, when it sold no vehicles at all in the Korean market, according to data from Carisyou and the Korean trade ministry.
The sharp decline reflects a confluence of headwinds impacting Tesla’s momentum in South Korea. Consumer concerns about safety, rising prices, and limited charging infrastructure continue to weigh on demand. This is further compounded by broader economic factors, with higher interest rates and inflation prompting consumers to tighten their belts.
The data reveals a broader slowdown in the South Korean electric vehicle (EV) market, with new EV registrations plunging 80% in January compared to December 2023. Industry experts suggest that early adopters have already made their EV purchases, while mass-market consumers remain hesitant due to price and infrastructure concerns. Additionally, Tesla’s association with China, a sensitive topic in South Korea, might be influencing purchase decisions.
Seasonal buying patterns also play a role, with many Koreans traditionally delaying car purchases in January to wait for government subsidy announcements. While Tesla acknowledges this factor, it faces additional challenges specific to its Model Y. Despite initially qualifying for full government subsidies due to its price point, recent changes have halved the available incentive, potentially impacting its affordability.
Tesla’s struggles in South Korea highlight the dynamic nature of the EV market and the complex challenges automakers face in navigating different consumer preferences and regulatory landscapes. The company’s future performance in the region will depend on its ability to address these concerns and adapt its strategies to the evolving market dynamics.