South Korea’s new EV policy targets BYD, Tesla Model Y while favoring Hyundai and Kia
South Korea’s government looks to give domestic automakers Hyundai and Kia a break with its new EV policy. The new EV subsidy policy is in response to price cuts on Tesla’s Model Y and BYD’s models, which use lower-cost LFP batteries.
Targeting Tesla, BYD, and cheaper EV batteries
The revised EV policy is Korea’s attempt to give domestic automakers an edge as they look to level the playing field.
“Tesla dropping prices last year, coupled with the rise of BYD, kicked off a price war in the global EV market,” Yang Jin-Soo, who leads Hyundai’s Business Research Center auto group, explained.
With the market moving past early adopters, “hitting the right price point for the broader market is critical.”
According to The Korea Herald, the new plan sets the maximum grant at around $4,800 (6.5 million won). That’s $225 (300,000 won) less than last year’s policy. The vehicle’s range, price, and battery type determine its eligibility.
The last part, the type of battery, has become a focus of Korea’s new EV policy. Korea announced the changes on Feb 6, including significantly reduced subsidies for EVs with “lower-performance batteries,” like LFP batteries from China.
BYD, which surpassed Tesla to become the top-selling EV maker in the last three months of 2023, dominated the LFP battery market.
According to data from the China Automotive Battery Industry Alliance, BYD held over 40% of the LFP battery market through November. Rival CATL was second with nearly 34% of the market. CATL supplies batteries for Tesla’s best-selling Model Y, sold overseas.
(Source: Tesla)
Korea is also targeting higher prices, setting a cap at $41,000, down from roughly $43,000 last year.
Korea’s EV policy gives Hyundai and Kia an edge
After introducing its more affordable Model Y last year (with an LFP battery), Tesla saw sales in the country soar. With prices of $16,000 lower than other variants, Tesla’s sales in September rose nearly 876%. It captured about 10% of Korea’s entire 2023 EV market in four months.
The report notes Tesla’s Model Y accounted for about $24 million of Korea’s subsidies granted last year alone.
Meanwhile, subsidies for Hyundai and Kia EVs, like the IONIQ 5 and EV6, remain mostly unchanged. The IONIQ 5 and EV6 Long Range have 458 km (284 mi) and 475 km (295 mi) range, respectively, with prices around $38,000 and $36,000.
Although below the 500 km (310 mi) benchmark, the models are equipped with NCM batteries, qualifying them for up to $1,300 more than lower-performance alternatives.
Tesla adjusted the price of its Model Y Thursday to $41,000, down from $43,000 and below Korea’s new EV policy threshold. Polestar and VW also dropped prices in response this week.
With the new policy in place, Hyundai’s IONIQ 5 could earn an over $2,800 subsidy gap over the Model Y.
Electrek’s Take
The new EV subsidy plan is viewed as Korea’s response to cheaper foreign models entering the country, like Tesla’s Model Y.
BYD is also planning to begin selling EVs in South Korea within the first half of the year. Sources say the BYD Atto 3 will be the first to roll out. The Atto 3 was BYD’s best-seller last year, with over 100,000 units sold overseas, or 40% of its global EV sales.
The automaker plans to launch other low-cost models like the Dolphin and Seal. BYD’s Atto 3 will compete with the Hyundai IONIQ 5 and Kia EV6.
Hyundai Motor’s outside advisory committee said, “Chinese automobiles are crossing the Great Wall of China and entering the global market like a tsunami.”
Korea’s new EV policy mirrors that of broader international actions like the Inflation Reduction Act in the US and the European Commission’s probe into Chinese EVs.
Meanwhile, others view it as a “band-aid for sales.” Professor Park Chul-wan, a member of the Presidential Commission on 2050 Carbon Neutrality and Green Growth, said, “We could end up only with expensive EVs that hinder mass adoption” by penalizing cheaper batteries.
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Solar panel giant Qcells announced today that it’s temporarily furloughing 1,000 US workers – 25% of its workforce – and reducing pay and shifts at its factories in northeast Georgia due to supply chain delays caused by US Customs.
Qcells furloughs 1,000 workers
The supply chain delays are hindering the company’s ability to import components to build its solar panels. This has resulted in Qcells’ two factories in Cartersville and Dalton being unable to operate at full capacity for several months.
Qcells spokeswoman Marta Stoepker shared the following statement in an exclusive with Channel 2 Action News in Atlanta:
The company says the furloughed workers, who were notified this afternoon, will retain full benefits and won’t be laid off. However, Qcells will no longer be using staffing agency employees in Georgia “at this time.”
As Qcells introduced new supply chains to support its growing solar panel manufacturing facilities in Georgia, the company was recently forced to scale back production while our shipments into the US were delayed in the customs clearance process.
Although our supply chain operations are beginning to normalize, today we shared with our employees that HR actions must be taken to improve operational efficiency until production capacity returns to normal levels.
Stoepker said it expects to bring the furloughed workers back “in the coming weeks and months.” She continued:
Our commitment to building the entire solar supply chain in the United States remains. We will soon be back on track with the full force of our Georgia team delivering American-made energy to communities around the country.
Electrek’s Take
In January 2023, the Seoul-headquartered Qcells announced it would invest more than $2.5 billion to build a solar supply chain in Georgia – the largest-ever investment in clean energy manufacturing in the US to date. That included expanding the Dalton solar factory and building a fully integrated solar supply chain factory in Cartersville, Georgia, that will manufacture solar ingots, wafers, cells, and finished panels.
It’s not quite there yet, because that takes time. In the meantime, it’s being penalized by Customs. The US government under Trump says it’s keen on boosting domestic manufacturing. Why would it work against a company that’s onshoring an entire solar supply chain, including recycling?
Dalton and Cartersville employ nearly 4,000 people. Its total output will reach 8.4 GW of solar production capacity per year, which is equivalent to nearly 46,000 panels per day – enough to power approximately 1.3 million homes annually.
It’s ludicrous that it has been forced to furlough a quarter of its workforce due to the ineptness of the Trump administration’s US Customs policies. This is right up there with the ICE arrests at Hyundai’s plant in Georgia. Bravo.
Read more: Georgia gives US solar panel manufacturing a big boost with a new factory
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The breakthrough EV batteries Toyota says will double driving range and cut charging times are facing another setback. The company is once again delaying plans for a new battery plant in Japan.
Why is Toyota delaying its EV battery plant this time?
Earlier this year, Toyota bought a 280,000-square-meter plot of land in Fukuoka, Japan, where it planned to build a plant to produce the more advanced EV batteries.
A location agreement was expected to be signed by April, but Toyota pushed back construction by several months, blaming slower-than-expected demand for electric vehicles.
The agreement was expected to be finalized this Fall, but that will no longer be the case. According to Nikkei, Toyota is delaying the EV battery plant for the second time. Toyota will review and adjust plans over the next year.
Fukuoka governor, Seitaro Hattori, confirmed the news with reporters on Friday following a meeting with Toyota’s president, Koji Sato. Hattori also shut down claims that Toyota was planning to scrap the battery plant altogether.
Toyota again blamed slowing EV demand for the delay. The decision comes despite Keiji Kaita, president of Toyota’s Carbon Neutral Advanced Engineering Development Center, confirming at the Japan Mobility Show just last week that it’s “sticking on the schedule” to introduce its first solid-state battery-powered EV by 2028.
Last month, Toyota said it aimed to “achieve the world’s first practical use of all-solid-state batteries in BEVs” after securing a partnership with Sumitomo Metal Mining Co. to mass-produce them. It’s also working with Japanese oil giant Idemitsu.
The company recently revealed a solid-state battery pack prototype that it claims can deliver 747 miles (1,200 km) range and 10-minute fast charging, but will we ever see it actually in production?
Electrek’s Take
Toyota has been making empty promises about EV batteries for almost a decade now. It initially planned to introduce solid-state EV batteries in 2020, then pushed it to 2023, then 2026, and now it’s saying it will be around 2028.
Mass production is likely closer to the end of the decade, if Toyota doesn’t delay it again. While it’s blaming the slowing demand, global EV sales are still on the rise. According to Rho Motion, global EV sales topped 2 million for the first time in a single month in September 2025. Through the first nine months of the year, EV sales are up 26% compared to the same period in 2024.
Even with the US ending the $7,500 federal tax credit and other policies designed to promote electric vehicles, global adoption will continue building momentum over the next few years.
Is it a demand issue, or is Toyota just looking for another excuse? With rivals like Volkswagen, Mercedes-Benz, Hyundai, BMW, and Honda advancing next-gen EV batteries, Toyota will only fall further behind if it continues delaying key projects.
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