South Korea Electric Car Market Report and Forecast 2024-2032

South Korea Electric Car Market Size

The South Korea electric car market is expected to grow at a CAGR of about 33.8% in the forecast period of 2024-2032. The Government’s support to popularise electric vehicles and celebrity collaborations with automobile brands are anticipated to drive the market for electric cars during the forecast period.

South Korea Electric Car Market Outlook

• In 2021, there were 78,106 electric car units sold in South Korea, a significant increase from previous years.

• As of 2023, the cumulative number of registered electric vehicles in South Korea reached 543,900, a 39.5% jump from the 389,855 recorded at the end of 2022.

• As per industry reports, the Hyundai Ioniq 5 was the top-selling EV model in 2023, with 70,756 units registered. Hyundai's Porter 2 EV was also among the best-selling electric vehicle models.

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South Korea Electric Car Market Growth

An electric vehicle is referred to as an EV. EV cars run entirely or mostly on electricity. While some electric vehicles (EVs) use lithium-ion batteries, lead-acid or nickel-metal hydride batteries are now considered the industry standard because of their improved energy retention and better durability.

South Korea electric car market expansion can be attributed to the government support, expanding charging infrastructure, and increasing consumer awareness. By 2030, the government aims to have over 8 million electric cars on South Korean roads. To support this, the government is providing subsidies for EV purchases, investing in charging infrastructure, and commercialising autonomous EVs till 2030. Celebrity collaborations with automakers are also anticipated to boost consumer interest.

Key Trends and Developments

Surge in EV sales, growth of electric vehicle charging stations, and technological advancements are boosting the South Korea electric car market development

May 2024

The Tesla Model 3 has become South Korea's top-selling imported car, surpassing German rivals like Mercedes-Benz E300 4Matic and BMW 520, according to data from the Korea Automobile Importers and Distributors Association (KAIDA).

May 2024

South Korea's eco-friendly car sales have surpassed 100,000 units in the first quarter of 2024, marking a significant milestone in the country's shift towards sustainable transportation. This growth is attributed to the increasing popularity of electric and hybrid vehicles in the Korean electric car market.

April 2024

Hyundai Motor and Kia forged a strategic partnership with Exide Energy, a leading Indian battery company, to localise EV battery production in India, focusing on lithium-iron-phosphate (LFP) cells. The signing ceremony took place at Hyundai Motor Group's Namyang Research and Development Centre in South Korea.

November 2023

Hyundai Motor Company advanced its electrification vision with a new EV-dedicated plant in Ulsan, investing approximately USD 1.53 billion for a capacity to produce 200,000 EVs annually starting in 2026.

Consumers shift towards EVs

The use of electric vehicles, specifically electric cars is anticipated to expand throughout the forecast period because of factors such as increasing purchasing power, rising cost of fuel, steady depletion of fossil fuels, and government campaigns to raise public awareness about sustainable electric vehicles in the country.

Expansion of electric vehicle charging infrastructure

The country has made significant initiatives to install a substantial number of charging points across cities like Seoul. The Seoul Metropolitan Government aims to install 10,000 public charging stations by 2025, making it easier for drivers to charge their vehicles on the go.

Technological advancements and innovation

Market players are heavily investing in research and development to advance EV technology, enhance production facilities, and expand EV charging infrastructure, which is shaping the South Korea electric car market outlook. Hyundai and Kia are investing in autonomous driving technologies, with plans to commercialise Level 3 autonomous vehicles by 2025.

Government support and incentives

Government initiatives such as tax breaks, financial aid, and investments in research and development are encouraging consumers to switch to electric vehicles. The government offers a subsidy of up to 14 million won for purchasing an electric vehicle, making EVs more affordable and attractive to consumers.

South Korea Electric Car Market Trends

South Korea is expanding its electric car charging infrastructure to make sure that everyone can use their EVs effectively. According to the government, the national ratio of chargers to EVs must increase to at least 50%. To assist the purchase of approximately 27,000 EVs for the entire year, the Seoul city government provided incentives to more than 14,000 owners of EVs during the first half of 2023. The government intends to put around 3 million more EVs on the road in the following four years. This is anticipated to provide opportunities for the manufacturers to expand the production of electric cars and can lead to South Korea electric car market growth.

The Korean government has also planned to construct more than 70 units of 350kW-class ultra-fast chargers, that can recharge automobiles three times quicker than chargers currently being used in the country. This will guarantee that after 20 minutes of charging, all drivers may travel at least 300 km (186 miles). The South Korean government has set a sales target that 15% of the sales must come from electric vehicles. Hence, this is a significant factor contributing to the market’s expansion.

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South Korea Electric Car Industry Segmentation

The EMR’s report titled “South Korea Electric Car Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Propulsion Technology

• Battery Electric Car

• Fuel Cell Electric Car

• Plug-in Hybrid Electric Car

• Others

Market Breakup by Drive Type

• Front Wheel Drive

• Rear Wheel Drive

• All Wheel Drive

Market Breakup by Top Speed

• <= 150 MPH

• >150 MPH

Market Breakup by Vehicle Class

• Mid-priced

• Luxury

Market Breakup by Vehicle Type

• Hatchback

• Sedan

• SUV

• Others

South Korea Electric Car Market Share

Electric SUVs are the most popular as they have a higher seating capacity and are eco-friendly

SUVs are gaining popularity in the market, reflecting a shift towards larger, more versatile vehicles with electric powertrains. The demand for electric SUVs is on the rise, driven by factors such as increased cargo space, higher seating capacity, and a growing preference for eco-friendly vehicles among consumers.

Hatchbacks have traditionally been popular in South Korea due to their compact size, fuel efficiency, and urban-friendly design. As per South Korea electric car market analysis, the electric hatchback segment is experiencing growth, with consumers showing interest in smaller electric vehicles that are practical for city driving and commuting.

Fuel cell and battery electric cars hold significant market shares due to rise in demand for EVs with advanced technologies

Fuel cell electric cars are also a prominent segment in the market, showcasing the country's emphasis on hydrogen technology. South Korean government plans to have 100,000 fuel cell cars on the road by 2025, which is actively supporting the growth of the hydrogen economy and fuel cell vehicles suitable for long-haul and heavy-load transportation, as well as industrial power and heating energy.

Battery electric cars are gaining significant traction in the South Korea electric car market share, driven by the country's focus on eco-friendly transportation and technological advancements in battery technology. The market for battery electric cars is expanding rapidly, with a growing number of models available from various automakers.

Plug-in hybrid electric cars, on the other hand, offer a blend of electric and internal combustion engine technology. These vehicles provide flexibility by allowing drivers to switch between electric and gasoline power, catering to different driving needs. South Korea's government subsidies and incentives for plug-in hybrid electric cars are driving their adoption in the market.

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Leading Companies in the South Korea Electric Car Market

Market players are focused on government support and incentives, technological advancements, and collaborations to advance EV technology and drive growth in the market

Hyundai Motor Company, founded in 1967 and headquartered in Seoul, South Korea, is a global automotive manufacturer. The company is known for producing a wide range of vehicles, including sedans, SUVs, and electric vehicles. It also offers services such as vehicle financing, leasing, and maintenance.

Honda Motor Co., Ltd., established in 1948 and based in Tokyo, Japan, is a renowned multinational corporation specialising in automobiles, motorcycles, and power equipment. It offers a diverse portfolio of vehicles and power products to meet the needs of consumers globally.

Nissan Motor Co., Ltd., founded in 1933 and headquartered in Kanagawa, Japan, is a leading automotive manufacturer with a strong global presence. The company is known for its wide range of automotive products, including cars, trucks, and electric vehicles. It also provides marine equipment and services.

Kia Corporation was founded in 1944 and is headquartered in Seoul, South Korea. The company is a prominent player in the automotive industry, manufacturing and distributing motor vehicles and parts globally. It offers a diverse lineup of vehicles, including sedans, SUVs, and electric vehicles.

Other key players in the South Korea electric car market include Tesla, Inc., BMW AG, and Mercedes-Benz AG., among others.

Key Highlights of the Report