Cheaper Tesla Model Y looks to send a shock to Korea's EV market

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Cheaper Tesla Model Y looks to send a shock to Korea's EV market

Published: 09 Apr. 2025, 21:46 Updated: 10 Apr. 2025, 19:57

Audio report: written by reporters, read by AI

Tesla’s newly launched lower-priced Model Y vehicle [TESLA]

Tesla’s newly launched lower-priced Model Y is shaking up Korea’s electric vehicle (EV) market, triggering fierce competition as subsidies make it available at cheaper prices in certain regions.

On April 2, Tesla officially launched the facelifted version of its Model Y, codenamed “Project Juniper," in the Korean market, four years after the model's initial debut in 2021. The updated design has drawn attention, but it’s the pricing that has made headlines.

“It’s essentially Tesla versus every other electric vehicle,” remarked one executive at a foreign automaker, watching the rapid success of Model Y in Korea.

The rear-wheel drive (RWD) variant of the new Model Y starts at 52.99 million won ($35,870), 7 million won cheaper than the 59.99 million won price tag when it first launched in Korea. Despite its higher price of 73 million won, the limited “Launch Edition” sold out quickly and is now unavailable for purchase on Tesla’s website.

Buyers of the 52.99 million won RWD model are eligible for 1.88 million won in national subsidies, plus additional local government support. In Seoul, for example, buyers receive an extra 192,000 won, bringing the effective price to approximately 50.92 million won if there are no other discounts or youth subsidies received by the consumer.

A crowd is lined up in front of a Tesla store in Starfield Mall in Hanam, Gyeonggi, on March 28. [SCREEN CAPTURE]

Subsidies vary by region. In Busan, the same model is available for 50.37 million won, and in Daegu, for 50.30 million won. In several regions, the final price even falls below 50 million won, with 49.82 million won in Gwangmyeong, Gyeonggi, 48.85 million won in Yesan, South Chungcheong, and as low as 48.68 million won in Gurye, South Jeolla.

The industry is calling this a “price disruption” in the EV market, with consumers now able to purchase a popular midsized SUV EV for under 49 million won. Tesla's Shanghai Gigafactory plays a key role, enabling rapid mass production and shipment to Korea.

“Tesla can ship out thousands of vehicles a day like they're coming off an assembly line,” said another auto industry official. “Because EV purchases heavily depend on the availability of subsidies, there’s concern that the Model Y could deplete the funds quickly.”

An aerial drone photo shows U.S. carmaker Tesla's Megafactory in Shanghai on Feb. 8. [XINHUA/YONHAP]

Adding to the rush, the Ministry of Environment announced this year’s EV subsidy guidelines earlier than usual. Whereas the guidelines were published on Feb. 19 last year, they were released a full month earlier this year, on Jan. 15. EV sales in Korea reached 33,482 units in the first quarter this year, up 31 percent from 25,550 units during the same period last year, according to data from the Caris You Data Research Center.

Tesla sold 18,717 Model Y units in Korea last year, making it the country’s top-selling EV. With the latest model now priced in the 48 million won range, competitors are under mounting pressure.

"The guidelines for processing electric vehicle subsidies this year require that the supply be distributed in at least two separate rounds when announcing the annual allocation," said an Environment Ministry official. “Even if local allocations are exhausted in the first half, additional rounds will follow in the second half.”

“The national subsidy budget of 1.5 trillion won has never been fully depleted in a single year,” said another ministry official. “In fact, some remained unclaimed last year. Concerns may be overstated.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.

BY LEE SU-JEONG [[email protected]]