China overtakes Germany as Korea's top EV exporter

Industry

Published: 29 Nov. 2023, 07:00 Updated: 29 Nov. 2023, 17:55

China overtakes Germany as Korea's top EV exporter

Electric vehicles charge at a shopping mall in Seoul in September [YONHAP]

China has overtaken Germany as the top exporter of electric vehicles (EVs) to Korea, as sales of “Made in China” Teslas and electric buses rise.

China exported an estimated $1.9 billion worth of EVs to Korea between January and October, which is an on-year increase of 23.3 percent, according to data from the Korea International Trade Association (KITA).

In particular, Korea’s imports of Chinese EVs reached $172 million in October. That's more than double the figure for Germany, where imports totaled $70.4 million.

China first surpassed Germany in monthly EV sales in August and has continued its winning streak for the past three months. The country has climbed rapidly to the top after placing fifth in 2021 and third in 2022 for annual sales.

The top EV exporters to Korea are China, Germany, and the United States. China first surpassed Germany in monthly EV sales in August and has continued its winning streak for the past three months. [LEE JEONG-MIN]

Model Y vehicles produced at the Tesla Gigafactory in Shanghai played a big role in the jump in sales.

When lithium iron phosphate (LFP) batteries — which are cheaper and safer than the high-nickel batteries that are commonly used today — entered the scene in September, Tesla's production costs dropped by at least 20 million won ($15,350) per car. That was a boon for the company's earnings.

Chinese manufacturers are estimated to control more than 90 percent of the LFP battery market.

A total of 4,501 Teslas were sold in September according to the Korea Automobile & Mobility Association, which is more than six times the 696 vehicles that were sold in August and also a large on-year increase. The number did decrease to 2,829 vehicles in October.

Tesla Gigafactory Shanghai [BAIDU SCREEN CAPTURE]

Chinese EV companies are also targeting the domestic commercial vehicle market with their cost-competitive buses and trucks.

Around 2,300 China-made electric trucks were sold between January and October of this year, according to data from market tracker CarIsYou.

Almost half of all electric buses operating nationwide are Chinese imports, such as those from BYD, which is headquartered in Shenzhen, China.

China exported around 3.92 million automobiles between January and October, an on-year increase of 59.7 percent, according to the China Association of Automobile Manufacturers (CAAM).

“It won’t be long until full-fledged Chinese electric vehicle imports start, including not only commercial vehicles, but also cars,” said Jang Sang-sik, head of trend analysis at KITA.

As imports from China rise, so does the EV trade deficit. Korea posted 4.87 million dollars in trade deficits in 2018, which skyrocketed 100 times to more than 513.2 million dollars between January and October of this year.

The automobile sector's trade balance thus remains in the red. Korea’s automobile trade deficit with China was 466 million dollars last year; that had reached 799 million dollars by October of this year. This means that automobiles are playing a large role in the continuation of Korea's 13-month trade deficit with China, which began last October.

BY JEON JONG-HOON, KIM JU-YEON [kim.juyeon2@joongang.co.kr]