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BYD’s South Korea expansion challenges Hyundai dominance on home turf - Published OnOct 26, 2026 | 07:23 IST - Last Updated OnOct 26, 2026 | 07:23 IST BYD is rapidly expanding in South Korea, challenging Hyundai and Kia's domestic dominance by offering feature-rich, low-cost electric vehicles and hybrids. Despite facing hurdles such as sparse service infrastructure and resale concerns, BYD's aggressive pricing is disrupting the local market and ra... When Lee Seongdong decided to replace his 2016 Chevrolet Spark in April, a two-year wait for Hyundai Motor Co.’s Casper Electric was already pushing him toward BYD Co.’s Dolphin. He was so impressed by the feature-rich ride that he signed a contract on the spot. The price was attractive too: the Dolphin hatchback starts at 24.5 million won ($18,500), though discounts meant Lee paid less than 23 million won — similar to a subsidised Casper Electric, which can be bought at about 22 million won in Seoul, but only in its bare-bones trim. Combined with not having to wait for longer than South Korea’s mandatory military service to take delivery, the 47-year-old YouTuber said the BYD was “way too good to pass up.” Lee’s purchase reflects a burgeoning shift as BYD brings its low-cost strategy, already winning it market share in Europe, to increasingly price-sensitive buyers in South Korea. Bloomberg Intelligence data shows a ninefold jump in BYD’s EV and hybrid sales from January to August, to almost 18,000 units, while Hyundai’s comparable sales fell 6% to about 139,000. The momentum extended into September, when BYD’s registrations hit 20,000 — double its initial goal for the year, according to Korea Automobile & Mobility Association data. BYD’s rapid ascent means it’s overtaken Volvo and Toyota Motor Corp. in the ranks of foreign carmakers in Korea — a significant milestone given it only entered the passenger car market in early 2025 and, in July, lost access to government subsidies after not meeting some requirements. That’s a growing risk to local heavyweights Hyundai Motor Co. and Kia Corp., which despite still holding a combined 72% share of the domestic market, are struggling to compete with the lower-priced, technology-focused models on offer by BYD. For the first time since 2010 — excluding the 2020 pandemic slump — Hyundai’s annual global sales will likely fall below 4 million units, missing its 4.16 million target, according to Samsung Securities Co. analyst Esther Yim. “The biggest driver of their slowdown is Chinese competition,” Yim wrote in a recent note. “Chinese EV makers’ aggressive export push has ignited intense price wars everywhere except the US and India, and Hyundai and Kia are underperforming in all those markets.” Chinese automakers are accelerating their push into Korea. BYD is broadening its lineup with the Sealion 6 DM-i plug-in hybrid at 37.5 million won, the cheapest in its segment. Geely Automobile Holdings Ltd.’s premium brand Zeekr began deliveries of its 7X electric SUV last week after surpassing 1,500 preorders, while XPeng Inc. and Chery Automobile Co. have set up local entities ahead of their market debuts. The rapid expansion is rattling Hyundai’s executive ranks. Speaking at an event this month, Lee Jae-kyu, a senior vice president overseeing vehicle development at Hyundai Motor Group, said he felt “despair” at the design and pricing edge Chinese automakers displayed at the recent Paris Motor Show. “While European carmakers presented uninspiring designs and technology, Chinese vehicles offered superior design at prices roughly $10,000 cheaper,” Lee said. “I couldn’t shake the thought that European companies will go under soon, and even our group is structured in a way that it could eventually be swallowed by China.” Despite BYD’s rapid gains, analysts say Chinese brands face long-term hurdles due to sparse service infrastructure, high repair costs, steep insurance premiums and swift depreciation. In online driver communities, BYD owners regularly complain about spare parts delays and high repair bills, with minor bumper and fender benders exceeding 11 million won in some cases. BYD plans to expand its South Korea service locations to 26 from 20 by the end of this year. The Shenzhen-based company’s low-price strategy will ultimately be tested against Hyundai and Kia’s network of more than 1,200 domestic service centers, according to Brian Lee at CLSA Securities Korea Ltd. “Right now, everyone is focused purely on the sticker price,” he said. “But as the market matures and resale value, service access and maintenance costs become clear, their overall appeal could fade.” Still, expansion in new foreign markets is critical for Chinese automakers as they face slowing demand at home, growing barriers in Europe, and are effectively shut out of the US. In contrast, Korea imposes an import tariff of just 8% on Chinese passenger cars and in August excluded EVs from a bill granting tax credits to domestic manufacturers, leaving Hyundai and Kia with few policy shields against cheap Chinese imports. Last month, KAMA — representing South Korea’s five automakers also including GM Korea, Renault Korea and KG Mobility — urged parliament to pass tax incentives and policy support. “The penetration of Chinese EVs could trigger the collapse of not just domestic EV makers, but the entire auto industry,” the group warned in a statement. Growing concerns over China’s rapid push have prompted South Korean lawmakers to introduce a bipartisan bill this month proposing tax credits covering up to 50% of annual domestic production costs for strategic industries, including EVs. For buyers like Lee, the Dolphin owner, the broader policy worries mirror what he sees in the market: Chinese brands are raising the competitive bar. “I hope our domestic auto industry succeeds, but in the end, you have to win through open market competition,” Lee said. “Everyone needs to stay alert and compete.” Also Read: France's PM Lecornu, key ministers to meet student leaders Monday
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