SEOUL - A mass sell-off of electric vehicles (EVs) has begun in South Korea, following a fire involving a Mercedes-Benz EV in Incheon that destroyed more than 140 cars and sparked proposals to restrict EV access to underground carparks.
Since the fire on Aug 1, the market has been flooded with used EVs. K Car, South Korea’s second-largest used-car trading platform, reported an increase of 184 per cent in used-EV listings in the first week of August compared with the final week of July.
The Mercedes-Benz EQE series, which includes the standard EQE 300, the EQE 350+ – the exact model involved in the fire – along with its high-performance AMG counterpart and the EQE sport utility vehicle, has been especially hard hit by the market’s reaction. Following the incident, more than 100 EQE models have appeared on SK Encar, South Korea’s top used-car trading platform, pushing the total number of EQE vehicles for sale to 115 as at Aug 16.
As a result, prices for these luxury EVs have taken a nosedive. Prior to the fire, used EQE models typically sold for 60 million won (S$58,500) to 70 million won. Now, some certified pre-owned 2023 EQE 300 models are listed for as low as 59 million won, a significant drop from their original selling price of 92 million won.
The fallout from the Incheon fire is exacerbating an already tough year for EV makers in South Korea. Automakers are now rolling out aggressive promotions to counter growing consumer reluctance to buy EVs.
Hyundai Motors recently started offering significant discounts to entice buyers back into the EV market. These include up to five million won off the Kona Electric and a 10 per cent discount on the popular Ioniq 5. Meanwhile, Genesis, Hyundai’s luxury brand, is offering up to 5 per cent off all models, including the GV70 Electrified.
Importers are also feeling the pressure and are slashing prices to stay competitive. BMW is offering discounts of more than 12 per cent on its flagship electric models, the i7 and iX, while Audi has gone even further, offering nearly 30 per cent off its e-tron models, including the high-performance RS versions.
Despite these deals, consumers are not rushing back to the EV market.
According to car dealers in South Korea, some buyers who had already placed orders for new EVs are now cancelling them. Adding to the anxiety is talk of new regulations that could make owning an EV more cumbersome, like restricting their use in underground carparks due to fire risks.
The current crisis in South Korea’s used EV market is a snapshot of broader challenges facing the industry. According to data from the Ministry of Land, Infrastructure, and Transport and automobile market tracker Carisyou, the country sold 1.625 million EVs in 2023, down 1.1 per cent from the previous year.
The decline has persisted into 2024, with EV registrations from January to July falling by 13.4 per cent year on year. THE KOREA HERALD/ ASIA NEWS NETWORK
