Electric vehicle titan Tesla Inc. (NASDAQ:TSLA) managed to sell only one Model Y SUV in South Korea in January 2024, significantly underperforming compared to its previous sales in the Asian country.
Sales Plunge: According to a report by Bloomberg, Tesla registered just a single Model Y sale in South Korea last month. This downward trend in sales marks Tesla’s weakest performance in Korea since July 2022, when the company recorded zero car sales.
The decline in Tesla’s sales is part of an overall 80% drop in the number of newly registered electric vehicles in Korea in January compared to the previous month. Several factors, including seasonal shifts in demand, safety concerns surrounding EVs, high-interest rates, and insufficient charging infrastructure, contributed to this decline, as reported by Seoul-based researcher Carisyou and the Korean trade ministry.
Pricing Strategy: In the South Korean market, Tesla’s offerings are limited to the rear-wheel-drive version of the Model Y SUV, priced at approximately $43,000. Notably, the popular Model 3 sedan is not available in this market, making the Model Y RWD the most affordable Tesla option.
In comparison, Korean automakers like Hyundai and Kia offer electric SUVs at competitive prices. Hyundai’s Ioniq 5 electric SUV starts at $39,647 before tax incentives, while Kia’s Niro EV and EV6 begin at $38,459 and $38,579 respectively.
Competition in the U.S.: Not only facing sales challenges in Korea, but Tesla is also encountering strong competition from Korean automakers in the United States. Data from Kelly Blue Book revealed that Hyundai and Kia combined sold 87,597 EVs in the U.S. in 2023, surpassing individual American automakers General Motors and Ford in electric vehicle sales.
Hyundai’s Ioniq 5 emerged as the top-selling model for the brand in America, while Kia’s EV6 led its sales, highlighting the growing competition for Tesla in the U.S. market.