Korean Automakers Turn to Price Cuts as Imported EVs Escalate Low-Price Offensive

The electric vehicle line-ups of Kia Motors, one of the biggest Korean Car Maker

 

As imported electric vehicles—led by Tesla—intensify aggressive price competition in South Korea, domestic automakers have begun responding with price cuts of their own. With more than 20 new EV models set to launch in the Korean market this year alone, competition is expected to grow even fiercer.

Kia announced on Thursday that it would cut the price of its midsize electric SUV, the EV5 Long Range, by 2.8 million won, while reducing the price of the EV6 by 3 million won. As a result, the EV5 Long Range now starts at 45.75 million won for the base “Air” trim. After applying national and local government subsidies, as well as EV transition incentives, the effective purchase price in Seoul is expected to fall to around 37.28 million won.

The EV6 now starts at 43.6 million won for the standard version and 47.6 million won for the long-range version. With subsidies factored in, prices drop to approximately 35.79 million won and 38.89 million won, respectively. Notably, the newly launched EV5 Standard, the entry-level version of the EV5 lineup, is priced at 43.1 million won, bringing the post-subsidy purchase price into the mid-34 million won range.

Kia has also expanded financing incentives for the EV3 and EV4, offering installment plans with interest rates of 0.8% for 48 months and 1.1% for 60 months under its standard M-financing program. Industry observers interpret these moves as a direct response to imported EV brands that are leveraging price competitiveness to penetrate the Korean market.

Indeed, imported EV brands with production bases in China—including Tesla, Polestar, and BYD—have adopted unusually aggressive pricing strategies in South Korea. An analysis of Tesla’s Model 3 Performance prices across 50 countries shows an average global price of approximately 91.2 million won. In South Korea, however, Tesla sells the same model for just 59.99 million won—more than 30 million won cheaper. Excluding Hong Kong, South Korea offers the lowest price among all 50 markets. The Korean price undercuts those in the United States (80.53 million won), Europe (98.8 million won), and even China (71.7 million won), where the Model 3 is manufactured.

A similar pattern can be seen with other brands. The Polestar 4, which typically sells for between 80 million and 100 million won in the U.S. and Europe and over 70 million won in China, is priced at 66.9 million won in South Korea. BYD’s Korean pricing is likewise significantly lower than in most overseas markets, excluding China. Even accounting for the currently weak Korean won, analysts note that the recommended retail prices themselves are conspicuously low.

This pricing strategy appears closely tied to the Hyundai Motor Group’s dominant domestic market share. One executive at an imported carmaker commented, “The Korean market is unusual in that it is effectively dominated by a single company. To break into such a market, there is little choice but to compete on price—even if it means taking short-term losses.” Industry insiders expect that Zeekr’s midsize electric SUV, the 7X, which sells overseas for between 70 million and 100 million won, could enter the Korean market later this year at around 50 million won. BYD is also expected to introduce entry-level EV models in the 20 million won range.

Experts believe that EV price competition in South Korea will only intensify. As a result, Hyundai Motor Group is widely expected to announce additional EV purchase incentives in the near future. Cho Chul, a senior researcher at the Korea Institute for Industrial Economics and Trade, noted, “China’s EV market has already seen substantial price cuts since last year due to intense competition. That leaves ample room for further reductions in Korea as well. With government subsidies facing clear limits, improving price competitiveness has become an urgent task for domestic brands.”

Against this backdrop, Hyundai’s recent moves suggest a defensive recalibration rather than a fundamental shift in strategy. While the group has long emphasized hybrids as a more stable and profitable transition technology amid EV market uncertainty, the rapid influx of low-priced imported EVs—particularly from China—appears to be forcing a short-term response centered on pricing rather than product differentiation. Whether this approach can hold back the accelerating EV wave remains an open question.