[NEWS IN FOCUS] BYD's debut in Korea to keep Hyundai, Tesla on their toes

Industry

Published: 02 Mar. 2024, 12:17

[NEWS IN FOCUS] BYD's debut in Korea to keep Hyundai, Tesla on their toes

Visitors look at BYD's Atto 3 at the IAA Mobility 2023 in Munich, Germany on Sept. 8. [AP/YONHAP]

BYD, the world’s No. 1 EV maker, is gearing up to make its debut in Korea, threatening local manufacturers with its cheap vehicles.

The biggest Chinese automaker is currently preparing for the certification process for its EVs through the Environment Ministry which assesses mileage and battery safety among other criteria. The process normally takes two or three months, which implies that the official debut may come as early as the third quarter.

It comes after the Shenzhen-based automaker registered trademarks for six models in Korea last year, including the Seal sedan, the Dolphin small SUV, and the Atto mid-size SUV.

Local reports suggest that the first model to hit the Korean market will likely be the Atto, though the company has not confirmed any details.

“We are actively reviewing our entry into the Korean market,” a spokesperson for BYD Korea said, “but no details, such as models and timing, have been confirmed.”

BYD’s debut will likely shake up the domestic EV market, which is currently dominated by a few brands including Hyundai Motor and Tesla, as the Chinese company's lineup comes with much cheaper price tags.

The cars use lithium iron phosphate batteries, known to be around 30 percent cheaper than the nickel cobalt manganese batteries with which Korean companies have a firmer standing.

The new BYD Seal electric sedan is presented during the 91st Geneva International Motor Show in Geneva, Switzerland, on Feb. 26. [EPA/YONHAP]

BYD’s entry into the Korean passenger EV market will undoubtedly pose a threat to Hyundai, which has been seeing a constant decline in sales. It sold a total of 60,592 EVs in Korea last year, down 13.9 percent on year. Sales of its Ioniq 5s fell 39.4 percent on year, while those of the Ioniq 6s dropped by 17.8 percent on year.

The Atto 3, first introduced in China in 2022, is one of BYD's major models, with more than 500,000 units sold globally so far.

BYD has far outpaced Hyundai in the Japanese market since entering the country in 2022, selling 1,511 EVs last year compared to Hyundai's mere 492 units.

The price was the key determinant in the destiny of the two companies there. The sticker price of the Atto 3 has been set at around 4.4 million yen, or roughly $29,400, around $7,500 cheaper than Hyundai’s Ioniq 5 and Kia's EV5 despite possessing a similar range of some 400 kilometers (111 miles) per single charge, according to WLTP standards.

The Atto 3 is expected to be introduced at a price in the high-30 million-won (high-$20,000) range in Korea with a government subsidy included. The price of the Ioniq 5 starts around the mid-40 million-won range.

“The poor quality of Chinese EVs is still a concern, but if prices are shockingly cheap, why not?” a comment in an online community of EV owners in Korea read.

Since opening its Korea office in 2016, BYD has already dominated Korea’s electric commercial vehicle market. It sold a total of 439 electric buses, becoming the No. 1 Chinese brand here.

BYD’s e-Bus 12 runs for 503 kilometers per single charge compared to the Hyundai Elec City’s 420 kilometers, and is around 100 million won cheaper than the Elec City.

“BYD’s entry into the Korean market implies that it wants to use the country as a test bed to burnish its awareness before entering bigger markets like the United States and Europe,” said Kim Pil-soo, an automotive technology professor at Daelim University College who also serves as the chairperson of the Korea Electric Vehicle Association.

“China’s brands are often shunned by customers for their low quality, but they are chasing quickly to improve the quality and rebrand themselves.”

BYD is the world’s largest EV maker with 20.5 percent of the market as of last year, beating Tesla with 12.9 percent, according to SNE Research.

BYD in December said it will build a factory in Hungary, the first time a Chinese EV maker will have plant in Europe. It is also considering one in Mexico.

BY SARAH CHEA [chea.sarah@joongang.co.kr]