The push of Chinese electric vehicles is extending beyond the passenger car market into the broader transportation sector. After establishing a foothold in the electric bus and small cargo truck segments, Chinese companies are now entering the taxi market, raising the possibility of encroaching on the existing demand for domestic automakers. With price competitiveness and a robust sales and maintenance infrastructure, the pressure on the domestic commercial vehicle market is expected to increase.
According to data analyzed by Democratic Party lawmaker Kang Deuk-gu from the Ministry of Land, Infrastructure and Transport, of the 1,379 electric buses newly registered in South Korea from January to August this year, 304 were Chinese, accounting for 22%. While domestic electric buses still hold a majority at 78%, the presence of Chinese models has solidified their position in the domestic market.
Chinese companies are partnering with local firms to establish sales and maintenance networks, facilitating their market entry. BYD has teamed up with GS Global, Haiger with P-Line Motors, CHTC with EM Korea, and Joylong with E-Bion. Given the long operational nature of buses, the availability of parts and prompt maintenance are crucial, prompting these companies to leverage local distribution and service infrastructures to reduce maintenance burdens for transport operators.
Their business scope is also expanding from primarily city buses to long-distance transport. GS Global is working on launching BYD's 12-meter high-floor electric bus, the 'e-Coach 12,' in South Korea. Unlike low-floor city buses, high-floor buses can be utilized for long-distance transport. If Chinese electric buses penetrate the express, intercity, and charter bus markets, the competitive landscape with domestic companies will broaden significantly.
Movements from Chinese companies are also evident in the cargo truck market. Following the introduction of the 1-ton electric truck 'T4K' in 2023, BYD is preparing to launch a new model, the 'T35,' which is currently undergoing domestic certification and is expected to be released within the year. This strategy aims to expand their presence in the domestic small electric cargo truck market by introducing new models alongside existing ones.
Other Chinese manufacturers, such as Dongfeng Sokon and Xin Yuan, are also selling small electric cargo trucks in South Korea. Models like Masada and E-T Van are suitable for small cargo transport and delivery, broadening the options for domestic small commercial vehicles. Chinese companies are diversifying their supply range to include not only electric buses but also urban logistics and delivery vehicles.
Recently, the presence of Chinese electric vehicles in the taxi market has been growing. Companies that initially entered the domestic transportation market with electric buses and cargo trucks are now absorbing taxi demand by promoting passenger electric vehicles.
The primary reason transport operators are choosing Chinese electric vehicles is their relatively low initial purchase price and maintenance costs. Given that commercial vehicles typically have high mileage and utilization rates, the costs incurred after vehicle purchase directly impact profitability. Chinese companies are leveraging their domestic battery supply chains and large-scale production capabilities to maintain price competitiveness.
In contrast, domestic automakers are struggling to match the price competitiveness of Chinese vehicles. To narrow the price gap, cost reductions are necessary, but lowering sales prices while maintaining profitability is challenging. Especially if transport operators prioritize initial costs during the vehicle acquisition process, domestic vehicles may fall short in purchasing decisions, even if they excel in quality and after-sales service.
An industry insider noted, "The expansion of sales for Chinese electric commercial vehicles could impact the entire ecosystem of the domestic automotive industry, as buses and cargo trucks involve various local companies in manufacturing, body construction, specialized equipment, and parts supply."
* This article has been translated by AI.
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