Chinese EV Makers Expand Into South Korea and Japan

Chinese electric vehicle manufacturers are expanding into South Korea and Japan to offset a saturated domestic market. BYD has achieved significant success in South Korea, selling over 20,000 vehicles in the first nine months of 2026 and overtaking the combined sales of Toyota and Lexus. This growth is driven by high local demand for affordable EVs, which contrasts with the premium focus of domestic brands Hyundai and Kia.

Expansion into Japan has been slower, with BYD holding only a 0.1% market share. Japanese consumers maintain a strong preference for hybrids and domestic brands. Additionally, political tensions under Prime Minister Sanae Takaichi and security concerns regarding remote vehicle control have created a challenging business environment.

Other Chinese brands, including Geely's Zeekr, Xpeng, and Chery, are initiating market entries or planning launches in both countries through 2027. In response to the competition, the Korea Automobile & Mobility Association has called for tax incentives for Korean-made EVs to protect domestic manufacturers.