Synopsis
South Korea's exported vehicle unit prices dipped for the first time in eight years, attributed to a decline in electric vehicle sales and global demand issues. The government plans to invest significantly to stimulate EV purchases and address domestic demand challenges.Key Takeaways
- Unit price of exported vehicles declined for the first time in eight years.
- Total exports were 2.78 million cars worth $64.1 billion.
- Average unit price fell to $23,048, down $221 from the previous year.
- Sales of eco-friendly cars dropped to $22.43 billion.
- Domestic EV sales decreased by 9.7 percent in 2024.
Seoul, Jan 26 (NationPress) The unit price of South Korea's exported vehicles experienced a decline for the first time in eight years last year, largely due to a persistent slowdown in electric vehicle (EV) sales, according to data released on Sunday. South Korea exported 2.78 million cars valued at $64.1 billion in the previous year, as reported by the Korea Automobile Manufacturers Association (KAMA).
The average price per exported unit was recorded at $23,048, marking a decrease of $221 compared to the previous year, as stated by the Yonhap news agency.
This represents the first annual drop since 2016, when the unit price was $14,264. In recent years, the unit price had consistently risen, reaching a peak of $23,369 in 2023, driven by increasing demand for premium-priced EVs.
The recent downturn is attributed to a diminishing global appetite for eco-friendly vehicles during the so-called EV chasm, a transitional phase prior to widespread EV adoption.
South Korea's eco-friendly vehicle exports had seen a steady increase from $4.21 billion in 2018 to $23.48 billion in 2023, but fell to $22.43 billion last year.
Notably, overseas sales of EVs dropped by 26.6 percent year-on-year to 254,000 units.
An industry expert noted, “The recent rise in vehicle export unit prices was significantly driven by the growing demand for eco-friendly vehicles, particularly EVs.” They added, “The EV chasm, along with production disruptions due to heavy snowfall in November last year, contributed to the decline in EV exports.”
In response, the industry ministry announced that the government will allocate 1.5 trillion won ($1.02 billion) this year to encourage consumers to purchase electric vehicles.
This initiative aims to boost domestic demand for EVs, which has been sluggish due to safety concerns and limited charging infrastructure, as indicated by the Ministry of Trade, Industry and Energy.
As of the end of 2024, the total number of EVs and hydrogen fuel cell vehicles reached 720,000, with EVs comprising 680,000 of that total, according to Yonhap news agency.
Domestic sales of EVs saw a decline of 9.7 percent year-on-year to 147,000 in 2024, marking a decrease for the second consecutive year.
