American electric vehicle manufacturer Tesla has achieved a remarkable milestone in South Korea, surpassing 200,000 cumulative sales and capturing a 30% market share within ten years of its entry. Tesla Korea, which began sales in 2017, has experienced explosive growth, ranking among the top 0.03% of domestic companies by revenue (3 trillion won). However, its contributions in terms of investment, employment, and donations have been declining, raising concerns.
According to the Korea Automobile Importers and Distributors Association, Tesla registered 56,139 new vehicles in the first half of this year, leading the import car market with a 30.51% share. This figure represents a 192.2% increase compared to the same period last year, and the company is expected to surpass 100,000 units by the end of the year. For the first time this year, Tesla has also outperformed Hyundai in the domestic electric vehicle market. Kia leads electric vehicle sales with 72,078 units, followed by Tesla and Hyundai with 39,574 units.
Tesla's rapid growth is attributed to a strong fan base among South Korean consumers. Since establishing its local subsidiary on November 13, 2015, and opening its first store in Starfield Hanam in March 2017, Tesla has expanded to eight official stores and 16 service centers. Although Tesla is not a member of the Korea Automobile Importers and Distributors Association, the association has decided to include Tesla's sales figures in its statistics starting in 2024, anticipating annual growth of over 100% with projections of 29,750 units in 2024 and 59,916 units in 2025.
Despite its growing presence, Tesla's contributions to the domestic electric vehicle market remain minimal. The company's investments in employment, investment, and donations in South Korea have declined over the past year, even as it has received over 1 trillion won in government support during the past decade. Critics have also pointed out the contradiction of selling electric vehicles aimed at carbon neutrality while using lithium iron phosphate (LFP) batteries sourced from China, which are difficult to recycle. LFP batteries are considered chemical waste with negligible recycling value, and in China, they are criticized as a 'beginning of disaster' when disposed of in landfills. The lack of investment in building a domestic infrastructure for recycling used batteries is concerning, as is the fluctuating pricing strategy that seems to treat the South Korean market as a secondary market for China.
An industry insider noted, 'Tesla sells high-efficiency nickel-cobalt-manganese (NCM) battery vehicles in the U.S. and high-end lineup, while in Korea, it primarily sells cheaper LFP vehicles produced at its Shanghai factory. In the coming decades, the costs and environmental pollution associated with disposing of Tesla vehicles at the end of their life will ultimately fall on South Korean society.'
* This article has been translated by AI.
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