A BYD badge on an electric vehicle outside one of the company's dealerships in Beijing (Bloomberg)
Spotting an electric vehicle on the road in Korea is not a rare sight nowadays as the country’s EV penetration rate has reached nearly 10 percent. But that is a still long way off China, where more than half of all newly sold vehicles there run on battery.
BYD, a Chinese and world EV leader, is gearing up to make its debut in the Korean passenger vehicle market in January next year. To the Korean government and auto brands, this should serve less as a nudge to speed up the EV transition and more as a wake-up call.
Led by the three-headed Cerberus of Hyundai Motor Company, Kia and Genesis, Korea’s auto giant Hyundai Motor Group has been enjoying a surge on the global stage, becoming the world’s No. 3 auto conglomerate in terms of sales volume last year behind Japan’s Toyota and Germany’s Volkswagen.
The Korean auto market has traditionally, and perhaps rightfully, been dominated by longtime homegrown automaker Hyundai Motor Group. As the world shifts from internal combustion engine vehicles towards EVs, Hyundai Motor has been pulling up its sleeves to take the lead in this transition with international award-winning EVs, such as the Hyundai Ioniq 5 and Kia EV6.
However, a slow in EV market growth worldwide has hindered the Korean automaker’s all-out efforts to go fully electric, forcing it to take the detour of selling more hybrid vehicles to keep the business afloat. While it might be fair to note that Hyundai Motor is not the only ICE vehicle maker hit by the so-called “EV chasm,” BYD has been enjoying exponential growth.
The Chinese EV brand outpaced Tesla in third quarter revenue this year for the first time, with about $28.2 billion won ($20 million) in sales between July and Sept. It also sold over half a million EVs in October only, up about 66 percent from the same month last year.
Some could argue that most of BYD’s EV sales are coming from its home turf, but Liu Xueliang, general manager of BYD Asia Pacific auto sales division, would disagree. He told a group of Korean journalists at BYD’s headquarters in Shenzhen last month that the notion of EVs being sold well due to the Chinese government subsidies was only true 10 years ago, highlighting that customers are now choosing EVs over traditional cars because the former is a better option for them.
In fact, while driving around Shenzhen a lot more EVs with green number plates, given only to new energy vehicles, were spotted on the road than gasoline-powered cars. Accordingly, it was not difficult to find a charging station in the city.
Amid BYD's rapid expansion and advancement of various EV technologies, it even has developed its own EV battery named the Blade Battery, which is inflammable, according to the Chinese EV maker. Internalizing battery technology is one of the goals Hyundai Motor desperately aims to achieve.
Once BYD passenger vehicles hit the Korean market in January next year, the Chinese brand may not sell many units due to a not-so-welcoming sentiment towards Chinese products among some of the Korean public. Regardless, it appears that BYD does not hope to sell a lot of vehicles in Korea where the local market is nothing close to that of China.
Although Hyundai and Kia's throne here is unlikely to be threatened by the Chinese EV maker, both companies should become more vigilant and keep pushing for a more proactive EV shift. BYD vehicles could seriously dampen the homegrown brands’ competitiveness and reputation, if Korean customers trying out the imported EVs find them to be better in terms of technology, riding experience and safety.
Korean automakers, however, cannot counter BYD’s entrance into the Korean market alone. The government, too, should increase actions to energize the EV market and support domestic brands’ electrification efforts, by offering more EV subsidies, benefits for installing charging stations, and pushing for regulations that ensure increased charging infrastructure nationwide.
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