Tesla struggles to land in Korean market

Tesla Motors, which has been gearing up for its debut in the Korean market, is suffering setbacks here. The U.S.-based electric vehicle (EV) maker said it would open its first Korean showroom at the Starfield Hanam shopping mall in Gyeonggi Province by the end of last November, but has yet to do so.

According to industry sources, Thursday, Tesla’s two flagship models ― the Model S sedan and Model X sport utility vehicle (SUV) ― did not satisfy government standards for EV consumer subsidies.

The Ministry of Environment and provincial governments are offering 12 million won (US$11,000) to 19 million won in subsidies for each EV purchase. But the benefits are given to a vehicle that takes less than 10 hours to charge with a 7 kilowatt-hour low-speed charger, a requirement that Tesla apparently is struggling to meet.

Considering that retail prices of the Tesla Model S sedan and Model X SUV start from $66,000 and $74,000 respectively, in the U.S., the subsidies are substantial and Tesla will lose price competitiveness without being eligible for them.

“I wouldn’t buy a Tesla without the subsidy,” said a motorist surnamed Park in his 30s.

“Considering its shipping cost from the U.S., the final price tags for the Tesla Model S and Model X would be more than 100 million won in Korea. It is prohibitively expensive.”

Tesla has boasted that it received a total of 253,000 preorders worldwide for the affordable Model 3 sedan in the first week after it began receiving them, March 31 last year. The Model 3 costs $35,000 in the U.S.

Also, a number of consumers reportedly made orders for the Model 3 in advance via the Tesla Korea website, but most of them say they will cancel the preorders if the Model 3 sedan is not granted the consumer subsidies like the Model S and Model X.

“I thought that the deal was awesome. The vehicle’s price would go down to 20 million won with the subsidies,” said a motorist who made a preorder. “I will immediately cancel my preorder for the Model 3 if there are no consumer subsidies.”

Tesla also has some safety issues in the U.S.

In May, a Tesla Model S driver was killed after colliding with a truck on the highway while using the U.S. EV maker’s autopilot mode.

Korean actor Son Ji-chang also claimed that his Tesla Model X SUV unintentionally accelerated as he was parking it in his garage, crashing into his house in California, Sept. 30 last year. He and his son were allegedly injured in the accident.

Son filed a complaint against Tesla, asking the U.S. National Highway Traffic Safety Administration (NHTSA) to investigate the case.

Currently, Tesla’s first showroom at the Starfield Hanam shopping mall hasn’t opened yet for unknown reasons.

The shopping mall operator Shinsegae said that Tesla has delayed the opening due to in-house matters, and does not know when it will open.

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