Chinese-built vehicles overtake German imports for first time in Korea as EV share doubles

Environmentally friendly vehicles accounted for nearly six in 10 new vehicle registrations in Korea during the first half of 2026, according to a local car association's report on Tuesday. In the import market, China overtook Germany for the first time to become Korea's largest vehicle supplier.

A total of 850,636 new vehicles were registered in Korea between January and June this year, up 1.3 percent from the same period a year earlier, according to the Korea Automobile & Mobility Association (KAMA). 

New registrations of imported vehicles jumped 30 percent to 192,703 in the same period, accounting for 22.7 percent of all newly registered vehicles.

Persistently high oil prices following the Iran war accelerated the shift away from internal combustion engine vehicles. Their share of new registrations fell to 42 percent in this year’s first half from 53.7 percent a year earlier.

Diesel passenger vehicles saw the sharpest decline, with new registrations plunging 59.5 percent as automakers continued to scale back diesel model lineups.

Environmentally friendly vehicles, including EVs and hybrids, quickly filled the gap. They accounted for 57.8 percent of all new vehicle registrations in the first half and became the dominant powertrains in the domestic market.

New registrations of EVs surged 113.6 percent from a year earlier to 198,509, driven by the arrival of more affordable models and stronger sales of imported EVs from Tesla and BYD. Hybrid vehicles recorded 289,814 new registrations.

By manufacturing country, vehicles produced in China led imported vehicle registrations for the first time. Chinese-made vehicles recorded 79,444 new registrations in the first half and represented 41.2 percent of all imported vehicles. That pushed China ahead of Germany, which accounted for 30.1 percent with 57,954 registrations.

The surge was largely fueled by the popularity of Tesla's China-built Model Y and Model 3, along with the domestic launch of Chinese EVs such as BYD's Dolphin and Sealion 7, as well as the China-produced Polestar 4.

"The rapid inflow of Chinese-made EVs has positive aspects, including lower vehicle prices and broader consumer choice," KAMA said. "At the same time, it is putting pressure on Korea's manufacturing base and intensifying supply chain competition. Domestic automakers need to strengthen their price competitiveness while measures are also needed to protect the broader automotive ecosystem."

Vehicle purchases by individual consumers fell 3.3 percent from a year earlier, although buying patterns differed by age group.

New vehicle purchases by people in their 20s dropped 15.7 percent, while purchases by those aged 70 and older rose 6.7 percent.

"Consumers in their 20s are increasingly relying on car-sharing services because of the high cost of buying and maintaining a vehicle," KAMA said. "Core buying groups in their 30s to 50s have become more cautious about spending because of household debt and economic uncertainty. By contrast, demand for mobility among people aged 70 and older has grown as the older population expands and more older adults remain economically active."

"Tax benefits, including the individual consumption tax cut for eco-friendly vehicles such as hybrids, should continue to support the transition to future vehicles during the electrification period," Jeong Dae-jin, the president of KAMA, said. “EVs should also qualify for the domestic production promotion tax incentive to boost the competitiveness of the country's manufacturing infrastructure and automotive ecosystem.”

BY KO SUK-HYUN [[email protected]]