The domestic market share of South Korea's locally produced electric passenger vehicles has continued to decline, falling to 52% in 2025 from 69% in 2022. Meanwhile, demand for imported electric vehicles (EVs) has surged, with Tesla and BYD ranking as the top two EV brands in South Korea, selling 59,916 and 6,107 units respectively. Tesla’s Model Y, benefiting from cost advantages at its Shanghai factory, reduced its price by approximately 20 million won and became the best-selling imported model. BYD, meanwhile, quickly captured market share with competitively priced models around 30 million won. Although the South Korean government provides substantial subsidies—up to 5.7 million won—for domestic models such as the Hyundai Ioniq 6 and Kia EV6, significantly higher than those for Tesla (2.1 million won) and BYD (1.26 million won)—consumers still show a stronger preference for imported brands. Experts warn that without adequate policy support, South Korea’s EV industry competitiveness will further erode, urging the government to introduce domestic production incentives similar to the U.S. Inflation Reduction Act to counter the ongoing loss of market share.