South Korea Electric Vehicles Market Report and Forecast 2024-2032

South Korea Electric Vehicles Market Outlook

The South Korea market for electric vehicles reached 78106.60 units in 2021. The South Korea electric vehicles market is expected to grow owing to the innovation and technological advancements in the industry, coupled with the government’s support through subsidies.

News and Developments in the Market

Singapore’s VFlowTech to work collaboratively with We Inc and Seoul National University & Technology (SeoulTech) in setting up a self-reliant EV charging structure  at the gas stations in the country. The project is being supported by EUREKA in terms of funding for R&D to promote efficiency, and advancement of the industries and foster competitiveness among companies. VFlowTech will install 500kW storage for the fast charging of EVs. Modular PowerCube batteries of 150kW power will be installed in the country.

As of July, 349 businesses have registered as electric vehicle service providers  as per Korea Smart Grid Association. Moreover, companies like Tesla Inc. have installed supercharger stations in South Korea. Testing of micro chargers is being done by Samsung Fire & Marine Insurance while LG electronics has taken stakes in electric vehicle charger producing company AppleMango. There are no standard regulations in south Korea regarding fast chargers. and is currently in its development stage. 

LS group and its subsidiary LS Corp. established a corporation called LS E-Link to expand their business and enter the EV charging business. The new company is being set up with a 50:50 stake. LG group’s E1 Corp. is one of the largest EV charging companies in South Korea with more than 350 stations throughout the country.

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Key Trends in the Market

Electric vehicles, or EVs, are automobiles that run partially or entirely on electric power. They run on an electric motor rather than a combustion engine. Hence, it promotes a cleaner environment, is cost-efficient, reduces noise and air pollution, and is safer than typical gasoline-powered vehicles. Therefore, electric vehicles are seen as a sustainable alternative to conventional vehicles.

Rising Demand and Need for Low Emission Transport Alternatives

The demand for low-emission vehicles is going up due to various environmental concerns. Both the public and government want to reduce their carbon footprint, which is propelling them to opt for an environmentally sustainable alternative and this factor has greatly contributed to the popularization of EVs in South Korea. The demand of EVs are high as people are much inclined to high-tech and eco-friendly vehicles without compromising with the comfort and quality, which is bolstering the market of EVs in the country.

Government Support and Subsidies  to Boost the EVs Market

From 2009 to the first half of 2023, the government of Seoul province has helped by providing 52,400 EVs and the number is anticipated to go over 80,000 by the end of 2023. The government provide a subsidy of a maximum of 9 million won (US dollars 7,520) and it could go up to 27 million won for EVs such as electric trucks which are more than 85 million won in price. The government of Seoul has also pledged to provide 20 electric shuttle buses for commuting to government offices, medical institutions and other welfare purposes. The support from government has augmented the market of EVs in South Korea.

Opportunities in the Market

Various Types of EVs availability and the Rising Prices of Gasoline 

The non-renewable resources such as gasoline are exhausting at an alarming rate and their prices are continuously getting high which is compelling the customers to opt for environmentally safer as well as pocket-friendly medium of transport. EVs require only initial investment but they are quite economical in the long run-in terms of fuel-efficiency and easy maintenance. 

The high cost of fuels has made people conscious of choosing alternative fuel sources. Various types of EVs as per the need and affordability are available in the South Korea Electric Vehicles (EVs) Market such as battery EVs, hybrid EVs, and plug-in hybrid EVs, among others. 

Technological Advances and Celebrity Collaborations

The South Korea electric vehicle (EV) market is augmenting owing to the continuous innovation in the automobile industry. Technologies like artificial intelligence (AI), self-driving systems, advanced navigation, and advanced driver assistance systems (ADAS), among others, are attracting a lot of customers.

In 2020, the biggest boyband in the world, BTS, joined hands with Hyundai to promote EVs worldwide. They launched the global hydrogen movement under the ‘Because of You' campaign. The company launched the Hyundai Nexo, which is a fuel cell electric vehicle (FCEV). The car is gaining traction globally with top-notch technological features and eco-friendly qualities such as an air purification system and pure H2O emissions.

Challenges in the Market

The Effect of COVID-19 on the Metal Industry

The market for steel, aluminium, copper, and other metals were severely affected during the COVID-19 pandemic. However, the market is recovering gradually, and government support is expected to increase sales in the coming period. Many automobile conglomerates seem to be performing well since 2021 as EV sales are going up increasingly.

Limited Charging stations in the Country

By 2021, more than 12,000 charging stations  have been installed at supermarkets and hypermarkets, parking areas, pit stops, and various other locations. With the rising demand for EVs in South Korea, the no. of charging stations in the country also needs to be increased. To resolve that issue the country is aiming to reach the target of establishing 500,000 EV charging stations and installing 450 hydrogen fuel dispensing systems by 2025, which can bolster the market growth.

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Market Analysis

Based on charging type, the South Korea electric vehicle market can be segmented into AC supply and DC supply. On the basis of type, the market can be classified into battery electric vehicles, hybrid electric vehicles, and plug-in hybrid electric vehicles, among others. Based on top speed, the electric vehicle market in South Korea can be bifurcated into less than 100 KMPH and more than 100 KMPH. On the basis of vehicle type, the market can be segmented into two-wheelers, passenger cars, and commercial vehicles. On the basis of drive type, the market can be divided into front-wheel drive, rear-wheel drive, and all-wheel drive.

• Kia Corporation

• Hyundai Motor Company

• Toyota Motor Corporation

• Tesla, Inc.

• Honda Motor Co., Ltd.

• Others

Market Share by Charging Type

To fuel an electric vehicle, two types of electric current are used, which are alternating current (AC) and direct current (DC). While charging an EV from an AC charging station, the current gets converted into DC, whereas when the EV is charged from a DC charging station, the battery directly stores DC energy. However, DC stations reduce the charging time to approximately 15-20 minutes and can supply up to 350kW of energy to the battery. On the other hand, the AC battery offers a smooth ride and better acceleration. Both sectors seem to perform well in the market, securing a significant share in the industry.

Market Share by Type

The EV market can be classified into battery electric vehicles, hybrid electric vehicles, and plug-in hybrid electric vehicles, among others. HEVs are additionally referred to as series hybrid or parallel hybrid. Unlike all-electric vehicles (AEV), HEVs have an electric motor in addition to an engine. Fuel powers the engine, while batteries provide electricity for the motor. The term "series hybrid" also applies to PHEVs. Both a motor and an engine are present in such electric vehicles. It has a battery pack that is rechargeable, and an external power source is used to recharge the battery. With rising concerns about rising carbon footprints and air pollution, the market for electric vehicles is steadily expanding. With the increasing awareness regarding the benefits of electric vehicles, the market's growth is also escalating steadily.

Market Share by Top Speed

The market of EVs with a speed of more than 100 KMPH is comparatively larger than its counterpart. Moreover, the fuel efficiency of high-speed electric vehicles is greater than that of gasoline-powered vehicles, which makes them a preferable option for consumers. Because torque is what propels the car forward, electric vehicles produce far greater torque than gas-powered automobiles. In many contemporary designs, the motor of an electric vehicle also replaces the requirement for a conventional transmission. EVs are quicker to start since the power is sent directly to the wheels for rapid acceleration.

Market Share by Vehicle Type

The electric vehicle market of South Korea is segmented into two-wheelers, passenger cars, and commercial vehicles. The government of South Korea provides subsidies to all types of EVs based on their price range. The subsidy can differ from 9 million won to 27 million won. The Exient FCEV, the world's first commercially available hydrogen-electric truck, was introduced by Hyundai Motor Company in 2020. Recharging for 10 to 20 minutes gives a vehicle a range of approximately 400 km. With a 430 km range on a single charge, Hyundai Motor Company also manufactures hydrogen-powered electric buses known as the Elec-City FCEV. Among all the vehicle types, passenger cars secure a major share of the market. On the other hand, the two-wheeler and commercial vehicle markets are also expanding and will grow further during the forecast period.

Market Share by Drive Type

Three types of drive-type EVs are available in the industry, namely front-wheel drive, rear-wheel drive, and all-wheel drive. In front wheel drive, the front wheels propel the movement of the vehicle. The fuel is used judiciously and provides more mileage than a rear-wheel drive. However, in the rear-wheel type, the back wheels push the vehicle. Commercial vehicles like trucks are typically rear-wheel drive. In the case of all-wheel drive, all four wheels propel the movement of the vehicle. All the drive types are anticipated to expand due to the constant technological advancements and the increasing demand for electric vehicles among environmentally conscious customers.

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Competitive Landscape

Kia Corp. – Kia Corp was established in 1944, formerly known as Kia Motors Corp, and first started manufacturing bicycles and motorcycles. Currently, the company manufactures SUVs, MPVs, passenger cars, and commercial vehicles, among others. Kia Corp's annual revenue exceeds USD 17 billion and expends approximately 6% of it on R&D. The headquarters of Kia Corp are situated in Seoul, South Korea. 

Toyota Motor Corporation- Toyota Motor Corporation is a multinational automobile company. The company was established by Kiichiro Toyoda in the year 1937. The company is known for manufacturing fuel-efficient hybrid electric vehicles. Toyota Motor Corp. has segmented its business into three divisions, wherein it manufactures and sells automobiles and other automotive parts. The company excels at the automotive business while successfully developing, designing, producing, and assembling, various vehicles, especially market trucks. Furthermore, the firm is also adept at manufacturing the components and accessories that go with them. Nowadays, it is also participating in the creation of intelligent transportation systems with smart features and newer technologies. The headquarters of Toyota Motor Corporation are situated in Toyota City, Japan. The Financial Services division provides Toyota automobile dealers and consumers with retail leasing via lease agreements bought from dealers and the retail leasing provided by the financial services through easier lease agreements, thereby empowering the company financially. 

Key Highlights of the Report