Tesla (TSLA) and BYD Chinese EVs Capture One-Third of South Korea’s Market Share

So what’s happening here is a lot more interesting than what the headline is suggesting, because as its explained in the article, it’s Tesla cars being manufactured in China that is riding the foreign car boom in Korea. While the article does mention other Chinese entities like BYD, they’re still dwarfed by Tesla’s exports from China to Korea. So really it’s a story of American IP and Chinese manufacturing leveraging one another to sell to Korean consumers.

And this has some heavy implications for foreign companies doing business in China and the countries that headquarter them that want to reshore manufacturing. Because while for national or economic security reasons relocating manufacturing back to their home countries might be desirable, ultimately China does have a structural advantage in manufacturing cars here, hence why Korea’s Tesla imports are dominated by China rather than, say, the US. Thus forcing relocation could very much hurt a company’s own car sales even if it might rebalance trade.

This story is also a continuation of a growing surplus centralized on East Asia, where even import growth from all East Asian countries is reinforcing one another’s economies rather than rebalancing with the rest of the world. Expect them to run continually larger surpluses especially with regards to semiconductor manufacturing.