• South Korea’s used EV listings surged 184% after a fire incident involving Mercedes-Benz vehicles.

• Significant price drops observed for used EQE models reflect market volatility and consumer concerns.

• EV sales are declining, with some customers canceling orders amid ongoing safety regulatory discussions.

The electric vehicle (EV) market in South Korea is experiencing significant turbulence following a recent incident involving a Mercedes-Benz EV in Incheon. On August 1, a fire originating from this vehicle resulted in the destruction of over 140 cars, sparking discussions about potential restrictions on EV access to underground parking facilities.

In the aftermath of this event, the used EV market has seen a dramatic shift. According to The Korea Herald, K Car, one of South Korea’s leading used-car trading platforms, reported an extraordinary 184% increase in used EV listings during the first week of August compared to the previous week. This sudden influx of listings suggests a growing wariness among EV owners, potentially driven by safety concerns and the prospect of new regulations.

The Mercedes-Benz EQE series has been particularly affected by this market reaction. SK Encar, the country’s top used-car trading platform, witnessed a surge in EQE listings, with the total number reaching 115 by August 16. This flood of listings has had a significant impact on pricing, with some certified pre-owned 2023 EQE 300 models now available for as low as 59 million won (approximately $60,000 CAD), a substantial decrease from their original price of 92 million won (about $94,000 CAD).

In an effort to stimulate flagging EV sales, both domestic and international automakers are offering substantial discounts. Hyundai Motors is providing discounts of up to 5 million won (roughly $5,000 CAD) on the Kona Electric and a 10% price reduction on the IONIQ 5. Genesis, Hyundai’s luxury brand, is offering up to 5% off across its entire model range. International brands are also joining the trend, with BMW introducing discounts exceeding 12% on its i7 and iX models, while Audi is offering nearly 30% off its e-tron lineup, including high-performance variants.

Despite these aggressive pricing strategies, the EV market in South Korea continues to face significant challenges. Some customers are reportedly canceling previously placed orders for new EVs, indicating a shift in consumer confidence. The country’s overall EV sales declined by 1.1% in 2023 compared to the previous year, with 1.625 million units sold. This downward trend has continued into 2024, with EV registrations from January to July showing a 13.4% year-on-year decrease.

In light of the recent incident and ongoing safety concerns, authorities are contemplating potential regulatory changes. These discussions are particularly focused on the use of EVs in underground parking facilities, which could have far-reaching implications for EV owners and potential buyers. The proposed regulations, if implemented, may further impact consumer attitudes towards EV ownership and usage.

As the situation continues to evolve, it’s clear that the South Korean EV market is at a critical juncture, balancing technological advancement with safety considerations and consumer confidence. The industry’s response to these challenges, coupled with potential regulatory changes, will likely shape the future landscape of EV adoption in the country.