Despite anticipation that Tesla Motors might make inroads in South Korea this year, the American electric vehicle maker might fail to capture significant market share due to its high prices, industry watchers said Thursday.
Tesla will reportedly open flagship stores in Korea, with one in shopping mall Starfield in Hanam, a southeastern satellite city of Seoul, and the other possibly in Gangnam, southern Seoul.
“Tesla’s presence in Starfield Hanam is confirmed. It may open the store at the end of November at the shopping mall,” said a source from Shinsegae Group, which will run the nation’s largest complex shopping mall slated to open in September.
The automaker is also seeking to open its flagship store in Gangnam, one of Seoul’s most bustling and crowded districts, to attract young clients, according to a source familiar with the matter.
Online buzz over the American electric carmaker has been growing, even before Tesla’s official announcement on its entrance into the nation.
However, Tesla might not capture significant market share due to its price, industry watchers said.
“It may create much buzz among early adopters but that may not lead to real purchases due to high costs,” said Choi Woong-chul, a professor of Kookmin University’s college of automotive engineering.
Tesla’s Model S costs more than 100 million won ($89,800), while Hyundai Motor’s most luxury brand Genesis EQ900 costs from 73 million won to 153 million won. The Genesis brand G80 costs from 48 million won to 71 million won.
Tesla may compete with foreign brands such as Mercedes-Benz’s S-Class or the BMW 7 series whose prices are at a similar level, but its impact will be minor because most of the cars are registered as corporate cars or as chauffeur-driven models, according to SK Investment & Securities.
“Initially, the demand for Model S could be high among Tesla enthusiasts but the real success depends on how many fast chargers Tesla can secure,” said Shin Jae-young, an analyst at SK Investment & Securities.
The company has traditionally expanded its business in overseas markets by directly installing its Tesla supercharger stations, which allow its cars to be charged in less than an hour. The company has no official plan to install the chargers in Korea yet, and the chargers are reportedly not compatible with other electric cars such as those made by Hyundai Motors.
Tesla appears to be working hard to expand its charging stations here. Its officials reportedly visited Korea several times to meet with government officials from environment, industry and transportation to ask for expansion of charging infrastructure systems.
Recently, the government announced a plan to install nationwide 300 quick chargers and 30,000 full chargers, which are compatible with all electric cars including Tesla’s.
By Shin Ji-hye (
shinjh@heraldcorp.com)
