South Korea’s Eco-Friendly Car Sales Surpass 50% Market Share for the First Time

In May 2025, South Korea’s domestic eco-friendly vehicle sales surpassed 50% of the total market share for the first time, according to the country’s Ministry of Trade, Industry, and Energy (Motie). This milestone marks a significant shift in the country’s automotive landscape, driven by strong demand for Battery Electric Vehicles (BEVs), hybrid electric vehicles (HEVs), and plug-in hybrid vehicles (PHEVs). The surge in sales of eco-friendly cars signals the country’s continued commitment to reducing emissions and advancing sustainable mobility.

Eco-friendly vehicle sales reached approximately 73,500 units in May, reflecting a remarkable 39% year-over-year increase and a 5.6% monthly increase. The surge was particularly driven by BEVs, which saw a 60% growth in sales to approximately 21,400 units, and hybrids, which rose by 31% to 50,600 units. This growth helped eco-friendly vehicles overtake traditional internal combustion engine (ICE) vehicles in domestic sales for the first time.

Key Trends in South Korea’s Automotive Industry: Eco-Friendly vs. Traditional Vehicles

While the country saw a marked increase in eco-friendly car sales, overall domestic car sales rose by only 0.4% compared to the previous year, totaling around 141,900 units. This indicates that the demand for traditional vehicles is slowing as more consumers shift toward greener alternatives. However, despite the success in the eco-friendly segment, South Korea’s overall auto output experienced a 3.7% decline year-on-year in May, totaling approximately 359,000 units. The month-to-month decline was even more significant at 6.9%, reflecting challenges in the production side of the industry.

Exports of South Korean vehicles also saw a slight dip, with a 3.1% decrease compared to the previous year. Exports to the United States, in particular, faced a sharp drop of around 27% due to the impact of tariffs. However, exports to the European Union and other Asian countries saw a positive shift, with a 29% and 45% year-over-year increase in vehicle export values, totaling $837 million and $683 million, respectively.

The Growing Role of Eco-Friendly Vehicle Exports

Despite the overall decline in car exports, eco-friendly vehicle exports rose by 10% to about 75,200 units in May. The growth was largely driven by higher exports of hybrid electric vehicles, which saw a 25% increase to approximately 48,800 units. Meanwhile, BEV exports fell by 12%, amounting to about 21,100 units. This shift highlights the growing international demand for hybrid vehicles as automakers look to meet stricter environmental regulations and tap into emerging markets for green mobility solutions.

SuperMetalPrice Commentary:

South Korea’s achievement of surpassing a 50% market share for eco-friendly vehicles is a significant milestone in the global shift towards sustainable automotive solutions. The rapid growth of BEVs and hybrids reflects consumer preference for cleaner, more efficient transportation options. However, challenges remain, including the dip in overall vehicle exports due to tariffs and the decreasing production output. As the global automotive industry navigates these shifts, South Korea’s focus on eco-friendly vehicles positions it as a leader in the transition to green mobility. Future government support, coupled with growing international demand for eco-friendly cars, could further strengthen the country’s automotive industry.