[WHY] Koreans just aren’t that into small EVs

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[WHY] Koreans just aren’t that into small EVs

Renault's Twizy [SHUTTERSTOCK]

Renault's Twizy [SHUTTERSTOCK]

Korea is considered a wasteland for small electric vehicles (EVs).
These little cars have continuously tried knocking on the door of Korea's EV market, but their score cards proved dismal, with some of them resorting to withdrawing from the market completely and others biting the bullet as their sales figure nears zero.
It's not the small EVs' fault, but rather a peculiar phenomena detected only in Korea: Consumers here just aren't into small EVs.
Consumers in Europe and China, on the other hand, can't get enough of them, enchanted by their compact size and affordable price tag.
Renault's Zoe compact EV was the best-selling EV model in Europe in 2020 and stayed near the top last year as No. 3, outperforming competent models like Tesla's Model 3.
The same model, however, was the least popular model rolled out from Korean automakers last year, delivering only 774 units.
Data shows that 45 percent of all EVs sold in Germany from the first quarter of 2020 until second quarter of 2021 were compact models.
In China, the segment's popularity is even more noticeable.
The Hong Guang Mini EV, made by SAIC-GM-Wuling, swept the country’s EV market by storm last year, selling 344,890 units as of November — up 346 percent year-on-year. In less than a year since the model was introduced, it was already racing toward the top.
The potential for these small rides is continuing to grow.
The global market for small EVs is projected to grow from 2.2 million units in 2019 to 3.2 million units by 2025, according to an industry report by ResearchAndMarkets.
Despite this projection, however, small EVs are getting a cold shoulder in Korea. Without a major breakthrough, experts say, these little guys will continue to struggle in the country.
“It’s more accurate to say that there isn’t a market for small EVs in Korea because there are barely any models out there for sales,” said Lee Ho, a director at Korea Automotive Technology Institute (Katech)'s strategic research planning division.
Korea’s market for small EVs comprises of Renault’s Twizy and Zoe, as well as a couple other models from homegrown, mid-sized companies.

Big car love

Poor sales of small EVs in Korea may be contributed to the fact that many consumers here don't see the charm in small internal combustion engine cars, either.
Korean consumers' car preferences have largely depended on whether their cars can be used as a means of showing off their wealth — and in that aspect, small cars don't fit the bill.
"People in Korea consider cars as a secondary asset along with real estate properties," said Lee Ho-geun, an automotive engineering professor at Daeduk University.
"And secondary assets don't tend to shrink in size so long as wealth continues to accumulate. For example, unless there is an external factor, people don't generally move to smaller houses or buy smaller refrigerators and TVs. They only get bigger. Likewise, people earning more money go for bigger and bigger cars."
Small cars did experience a boom in the country, namely in the 1990s, but the trend quickly shifted toward sedans and then to large SUVs along with the growth of purchasing power and the rising popularity of outdoor activities such as camping.
According to CarIsYou data, 96,842 small cars were registered in 2021, accounting for the smallest share out of all segments in the country. The most popular segment was midsize cars, which registered 439,391 new units. By type, SUVs were the most popular, taking up 46 percent of all midsize cars.
“Koreans' preference for large cars over small cars plays a critical role when making decisions on purchasing EVs as well,” said a spokesman of Cevo Mobility, a midsize enterprise in Korea which sells mini EVs.
“They doubt the functionality and convenience of small EVs because they haven’t experienced the utility of small cars with an internal combustion engine."
Some carmakers ambitiously launched small EV models 10 years ago but had to exit the market due to the mediocre response.
Kia introduced an electric version of its Ray compact car in 2011, and Chevrolet's electric Spark compact car was introduced in 2013. Both models withdrew from the market within a few years.

Range matters

Range is of the utmost importance when it comes to purchasing EVs, and this applies to potential EV consumers all around the world.
But particularly in Korea, the bar may be set higher than in other countries because there is one route that comes to mind when imagining the great Korean road trip: Seoul to Busan.
Busan is a popular coastal destination in Korea, located some 400 kilometers (250 miles) south of Seoul. If getting there on a single charge is not possible, the model will probably not do well.
“In Korea, people start to feel comfortable when the model's range exceeds 400 kilometers per charge,” said Lee from Katech.
“Small EVs usually cannot offer that long of a range.”
Renault’s Zoe offers a range of 309 kilometers per charge, and BMW’s i3, which sold 93 units last year as of November, can travel 248 kilometers per charge.
Successful EVs in Korea, on the other hand, have ranges that exceed 400 kilometers.
Hyundai Motor's Ioniq 5, for example, which was the top-selling EV model in Korea last year, is able to travel 429 kilometers per charge. Kia's EV6, the second most popular model, can drive 475 kilometers per charge.
“When thinking what the longest trip in Korea would be, people usually think of [Seoul to] Busan,” said one source from Korea's import car industry who asked to remain anonymous.
“Even though they have never traveled to Busan by car, and even if there is a low probability of them doing so in the future, they think of the what-ifs and don’t want to take chances. They end up wanting to buy a car that can take them from Seoul to Busan on a single charge,” the source said.
Cevo Mobility's Cevo C-SE [CEVO MOBILITY]

Cevo Mobility's Cevo C-SE [CEVO MOBILITY]


Is there hope?

Enabling small EVs to drive as long as their larger counterparts is not feasible currently, since the size of the battery itself is a critical factor in determining its longevity.
Nonetheless, not all hope is lost for small EVs in Korea.
With the market maturing, the demand for second cars is expected to grow, and the scope of their usage will expand from the current focus of just going from point A to point B.
“The number of cars owned per household in Korea is lower than America and Europe,” said Lee from Katech. “With the market maturing, people will start looking for second cars or other types of mobility suitable for short trips or commuting. This could be a big opportunity since Korea's population is concentrated in Seoul.”
The number of vehicles per 1,000 inhabitants in Korea stood at 456 as of 2019, according to global market tracker Statista, whereas the figure stood at 837 in the United States and 589 in Germany as of 2018.
There are a number of small EVs scheduled to launch in Korea within the next couple of years as some carmakers have decided to take yet another shot at the Korean market.
Hyundai Motor is expected to launch an electric version of its compact Casper model in 2023. Casper, launched last year, was the first compact model car for Hyundai Motor in 19 years, following the suspension of Atos. There is also talk that a new Tesla hatchback model, tentatively named the Model 2, will launch in 2023.
"With more competitive models expected to come, prices will go down, leading to more demand," Lee said.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]
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