Chinese EVs win over some in South Korea, but Japan is proving to be a rougher road Chinese automakers are gaining ground in South Korea with affordable electric vehicles, but low EV demand, consumer scepticism and strained diplomatic ties are making Japan a harder market to crack. Thequestions came swiftly.

“Everyonereacted like, ‘Why did you buy a Chinese car? Are you trying to get yourselfkilled?’“ the 48-year-old Seoul resident said. Her purchase would have beenunthinkable just a few years ago in South Korea, where Chinese cars have beenlong dismissed as shoddy.

At around$18,500, the Dolphin compact was inexpensive, well equipped and - crucially -available. Kim initially wanted a Hyundai Casper EV but was told she would haveto wait more than two years for delivery.

After rapidexpansion in Europe and elsewhere, BYD and other Chinese automakers arenow targeting South Korea and Japan, two countries with entrenched carindustries - and no shortage of sceptical consumers. They are making inroads inSouth Korea, but Japanese sales have been muted.

The differenceis partly due to EV uptake. Roughly a quarter of the new cars sold in SouthKorea this year were EVs, versus 3% in Japan, according to industry data.

Chinese automakershave proven their ability to spend years building dealer networks and adapting carsto local tastes, according to industry executives and analysts.

It is a strategyborn of both confidence and necessity: China produces some of the mosttechnologically advanced cars available anywhere at prices rivals struggle tomatch. But its domestic market is so saturated with brands that carmakersneed to look overseas for growth and profit.

“They enterfirst, watch what happens and gradually adjust their strategy,” said LiaoJingnan, founder of MobyInfo, a Tokyo-based consultancy.

Reuters interviewedmore than a dozen people including company executives, dealers and EV buyers inboth South Korea and Japan for this article.

South Korea breakthrough BYD sold morethan 20,000 vehicles in South Korea in the first nine months of this year,overtaking the combined sales of Toyota and its Lexus brand, according tomarket research firm Carisyou.

BYD has beenable to take advantage of South Korea’s growing appetite forcheap EVs, said Lee Jae-il, a senior analyst at Eugene Investment& Securities. Petrol prices have surged almost 10% since the US-Israeli waron Iran started, but Hyundai and Kia focus mainly on premium EVs, offeringonly a few for under $30,000. “The timing hasworked particularly well for BYD,” Lee said.

Geely’s Zeekrbrand began taking orders for its 7X SUV in South Korea in June and plans toopen up to 14 showrooms by the end of the year. Chery is expected to enter themarket in 2027, according to an industry presentation reviewed byReuters. Chery declined to comment.

Xpeng, which setup a local unit in Korea last year, is now looking to hire someoneto build out its retail network, according to a job posting on LinkedIn. Xpeng declined to comment.

South Koreancarmakers are worried. Jeong Dae-jin, the chairman of the KoreaAutomobile & Mobility Association, has called for tax incentives forKorean-made EVs. Automakers were “verydesperate,” he said.

Japan proves tougher Japan may end uptesting the patience of Chinese automakers. Foreign brands account for onlyabout 6% of passenger car sales and drivers prefer hybrids, the technologychampioned by Toyota.

Relationsbetween Tokyo and Beijing have been fraught since last year under right-wingPrime Minister Sanae Takaichi, who has taken a harder line on China.

Some 88% ofJapanese and 71% of South Koreans have an unfavourable view of China, accordingto a Pew Research Center survey this year. Diplomatic strains have had noparticular impact on BYD’s sales, showroom visits or customer inquiries inJapan, a spokesperson for BYD Auto Japan said.

BYD, whichstarted selling cars in Japan in 2023, has more than 75 dealerships and plansto eventually expand to 100. It sold fewer than 4,000 cars in Japan in thefirst nine months of the year, just a 0.1% market In July, itlaunched a boxy EV in Japan’s “kei” minicar segment, which is dominated bydomestic firms. As of September, it had only sold about 650 of them,although BYD’s overall Japanese sales have risen every year.

“It’s not themarket share,” said Marc Yamada of consulting firm Alvarez & Marsal. “It’sthe growth.”

EMT, a startupbacked by Chery, plans to launch a kei car in the first half of 2027 andthree more models by 2029, Chief Technology Officer Koji Yamamoto toldReuters. It aims to build cars locally by the 2030s, he said.

Zeekr plans tolaunch a luxury van in Japan, initially targeting taxi fleets and chauffeurservices, said Hiroyasu Koma, CEO of folofly, Zeekr’s distributor.

One person whowill not be buying a Chinese car anytime soon is Fumio Kuwabara, an earlyadopter who has been driving Japanese EVs since 2010. He does not trust thereliability of Chinese cars, he said. “I feel likethey’ve cut corners in places you can’t see,” he said.

Ruling partylawmaker Daishiro Yamagiwa told Reuters that Japan must consider thesecurity risks from Chinese cars that can be controlled from outside thevehicle.

It is stillunclear whether Japanese consumers will hold out or end up overcomingtheir wariness as South Korean Lee Seong-dong did.

“Honestly, Ididn’t have a good image of Chinese cars, either,” said Lee, a content creatorin Seoul, who bought a Dolphin. “Seeing the carin person and driving it changed my thinking a lot,” he said.