Electric vehicle sales in South Korea hit a monthly record high last month. The purchase threshold lowered due to a subsidy system overhaul, combined with brand-specific price reduction competitions and diverse new vehicle launches, leading to an unusual surge in February, typically a slow season.
According to the Korea Automobile & Mobility Association (KAMA) on the 29th, new electric vehicle registrations in February this year reached 35,693 units, a 172% jump from February last year (13,128 units). This figure exceeds the previous monthly record of 28,519 units in September last year by 25%. In the same month, new registrations for gasoline and diesel vehicles fell by 27.8% and 57.1%, respectively, while hybrids decreased by 10.4%. Considering February is traditionally a slow season with fewer business days, the strong performance of electric vehicle sales is an exceptional trend.
The primary driver behind the surge in electric vehicle sales is the subsidy system overhaul. The newly introduced “electric vehicle transition support fund” this year provides an additional maximum of 1 million Korean won for those scrapping internal combustion engine vehicles older than three years and purchasing electric vehicles. The system change, which allowed electric vehicle purchases using only national funds without local government subsidies since September last year, also had a significant impact. With the subsidy guidelines announced in early January—two months earlier than previous years (February–March)—consumers rushed to secure subsidies. As of the same day, 29 out of 160 local governments nationwide had already exhausted their allocated quotas or had only single-digit remaining amounts. This explains the forecasts predicting similar or higher sales in March.
The power of subsidies is also evident in global markets. According to market research firm Benchmark Mineral Intelligence, global electric vehicle sales in February totaled 1.1 million units, an 11% decrease from the previous year. The U.S., which abolished federal tax credits, saw a 36% plunge in cumulative sales from January to February compared to the same period last year. In contrast, Germany (+26%), France (+30%), and Italy (+98%), which introduced new subsidies or maintained existing systems, showed clear growth.
The Tesla-led price reduction competition is also analyzed as a factor stimulating demand. After Tesla lowered the price of its Model 3 Performance by 9.4 million Korean won in late last year, Kia reduced the prices of its EV5 Long Range and EV6 by 2.8 million and 3 million Korean won, respectively. Hyundai also offered a 1 million Korean won discount to customers contracting purchases of the Ioniq 5·6·9 and Kona Electric this month. Chinese automaker BYD entered the low-price market with its electric vehicle “Dolphin,” starting at 24.5 million Korean won, intensifying competition.
New models cannot be overlooked. Kia’s purpose-built vehicle (PBV) PV5 sold 14,488 units in February alone, becoming the first domestic single electric vehicle model to surpass 10,000 monthly sales. This success stems from the sequential release of models for various purposes, including passenger, cargo, and small business deliveries. By brand, Kia (14,699 units, 41.2%) and Hyundai (8,944 units, 25.1%) accounted for two-thirds of total new sales.
With international oil prices surging due to the Strait of Hormuz blockade, observations suggest the transition to electric vehicles could accelerate. According to used car platform Cheotcha, inquiries for eco-friendly used cars increased by 24% in the month following late last month compared to the previous month.
