China’s BYD Co. will launch three electric passenger cars in South Korea this year, with an aggressive pricing strategy that it hopes will win market share from legacy local brands [hotlink]Hyundai Motor[/hotlink] Co. and Kia Corp.
BYD is already taking reservations for the Atto 3, which will cost 31.5 million won ($21,600) for the basic model and 33.3 million won for the upgraded Atto 3 Plus, Inchul Cho, managing director at BYD Korea’s passenger-car business, said Thursday. The automaker is also set to release the Seal electric sedan and Sealion 7 in the second half, Cho said, without disclosing prices.
The Atto 3’s cost excludes tax credits and subsidies. It’s the lowest price for the model outside of China and is cheaper than almost all offerings from Hyundai and Kia, the domestic powerhouses that dominate the market.
“We really thought about pricing for Atto 3 a lot,” Cho said. “Korean consumers have a very high standard for a car, so we thought it would be better for them to experience our cars more. The headquarters of BYD made a special offer for the Korean market.”
Headwinds
Chinese automakers are increasingly looking to crack into new markets as hefty tariffs imposed by the European Union and the US on EVs imported from China hurt sales prospects. BYD has already launched in Japan and is set to be joined by Geely Automobile Holdings Ltd. in South Korea as early as next year.
But even with its attractive pricing, BYD’s foray into the South Korean market faces headwinds ranging from a public fear about EV safety to tighter rules for cars with certain batteries and slowing sales.
A dramatic fire last year, caused by an unplugged electric Mercedes-Benz sedan exploding in an underground carpark, led to widespread anxiety about safety. In the wake of the incident, some office buildings banned EVs from parking and the government introduced a set of regulations that includes a requirement that automakers disclose the brand of battery used in their vehicles. EV sales dropped 10% last year, though hybrid sales were up by about a third, according to official data.
Officials are also looking at tightening subsidies based on a battery’s energy density and the value of recycled metals, which will likely disadvantage EVs that use lithium-iron-phosphate batteries — the kind typically used by Chinese manufacturers.
While BYD already has a commercial sales presence in South Korea—it’s sold about 1,000 electric buses—the company said it faces an uphill task in winning over everyday drivers. It will open 15 showrooms and 11 after-service centers to help with outreach.
“We are aware that many Koreans have concerns over the quality of Chinese vehicles and services as well as incorrect knowledge about EVs,” Cho said. “To soothe those worries, we will maximize events to offer customers for opportunities to experience our cars,” he said.
