South Korea’s electric vehicle sector is this year’s perfect example of one country with two different scenarios. While on one hand, the country is experiencing a strong domestic market for EVs, on the other, it undergoes an adverse impact of the United States 25 per cent tariff on EV imports. Yes, the United States is the largest export market for South Korea’s electric vehicles. In 2024, South Korea exported 2.78 million vehicles, most of the headed to the US, according to the Korea Automobile Manufacturers Association (KAMA). In 2025, the momentum faltered as the steep US duties dragged down export volumes lower. Meanwhile, the country’s EV production stood at 407,009 units, accounting for 11 per cent of total automobile production, with an increased sales figure Y-o-Y. The question now is whether the domestic market’s strength can meaningfully offset the shock from declining overseas demand.
Strong domestic market
As per the data shown by the International Trade Administration, the South Korean EV market is estimated to grow by 20 per cent of all vehicle sales combined by the end of 2025, creating opportunities for EV manufacturing in the US, including the charging infrastructure, advanced safety systems and battery technology. In the domestic market, South Korea’s sales of BEVs, HEVs and other EVs, in the first half of 2025, reached 319,249 units. The number exceeded 300,000 units for the first time, accounting for 40 per cent of the total automobile sales.
By 2031, South Korea's EV market is projected to see a CAGR of 28.49 per cent, reaching USD 63.52 billion. By 2030, the South Korean government is looking at supplying a total of 4.5 million EVs, by accelerating the charging infrastructure, besides subsidies and other incentives.
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