"The Dilemma of Fiscal Outflow in the 2nd Trillion Won Subsidy Era"... AS Deficiencies and Overreliance on Chinese Products Hidden Behind Tesla's Sales Surge

*This content was translated by AI.

In the domestic imported electric vehicle market, a massive entry of Chinese-made electric vehicles and the resulting structural changes are becoming increasingly evident. Chinese EV manufacturer BYD has successfully completed domestic range certification for its new 1-ton electric truck 'T35' and is now fully launching its offensive into the commercial vehicle market. Unlike the T4K launched in 2023 through GS Global, BYD has established a dedicated commercial vehicle sales subsidiary in Korea called 'BYD Korea Auto' to handle direct sales and services starting with the T35.

The BYD T35 achieves a driving range of 395 km in urban areas, 281 km on highways, 344 km combined, and 326 km in low-temperature combined conditions (based on standard temperature). By building its own maintenance network at key locations such as Sangam, Osan, Daegu, and Waegwan, BYD is challenging the domestic commercial vehicle market, which has long been dominated by Hyundai Motor and Kia. Consequently, tension within the industry is rising. This is a natural reaction for domestic car manufacturers who have already witnessed BYD's sales growth.

In the passenger car market, Tesla has become the focal point of controversy over massive subsidy outflows and inadequate after-sales service (AS) amid a surge in sales. With cumulative registrations exceeding 70,000 units from January to August this year, Tesla maintains an overwhelming lead in the imported vehicle segment. This trend is expected to continue for some time. As the government's electric vehicle subsidy budget expands to the 2nd trillion won level next year, Tesla is anticipated to receive concentrated benefits. However, many of the Tesla models currently sold in Korea are produced at Shanghai Gigafactory in China and are equipped with batteries manufactured by CATL in China. This is a decisive factor behind concerns over capital outflow from the country.

Tesla's own issues are also serious. Unexplained price hikes for major models, significant dividends and transfer pricing adjustments to its overseas headquarters, and a corporate tax reassessment of 25.1 billion won by the Seoul National Tax Service have all drawn criticism. Despite explosive sales growth, AS infrastructure remains insufficient, leading to growing consumer dissatisfaction. There are only 16 direct service centers nationwide and just two accident repair centers, resulting in severe maintenance backlogs.

Errors in the Battery Management System (BMS), which controls battery voltage and temperature, have led to average repair times reaching one month, with some cases extending up to 926 days. Other issues include the financial burden of accident repairs due to the Giga Casting method and high-voltage battery replacement costs amounting to tens of millions of won after warranty expiration. Calls are growing for rigorous quality control and expansion of domestic infrastructure to ensure sustainable growth.

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*This content was translated by AI.