Cho In-chul, managing director and head of BYD Korea's passenger car business, introduces the Chinese carmaker's Atto 3 electric SUV during a Korea launch event for the brand in Incheon, Jan. 16. Yonhap

BYD Korea will adopt a similar strategy to AliExpress by prioritizing the expansion of its initial market share through aggressive pricing even at the cost of a low margin, experts and industry officials said Monday.

AliExpress Korea adopted a similar business model last year when the Chinese e-commerce firm started posing a serious threat to domestic shopping platforms. The firm rose rapidly to become the nation's second-most-influential online shopping platform due largely to ultra-low pricing and a series of promotional benefits.

The Chinese electric vehicle (EV) maker looks to follow a similar path, after deciding to release its best-selling Atto 3 EV at a much cheaper price of 31.5 million won ($21,600) for Korea than in the firm's major overseas markets such as Europe and Southeast Asia.

Customers will pay less than 30 million won to purchase the vehicle after receiving subsidies. No other carmakers are selling EVs of a similar size at that price level here.

"BYD Korea is undeniably moving to engage in cutthroat competition with its rivals here, as the carmaker set the price at a very low level, given that the vehicle is at a disadvantage in winning subsidies due to its lithium iron phosphate (LFP) battery," said Kim Pil-soo, an automotive technology professor at Daelim University College.

BYD Korea's three electric vehicle models are on display during the brand's launch event in Incheon, Jan. 16. From left are the Seal, Atto 3 and Sealion 7. Yonhap

Chinese EV makers prefer equipping their vehicles with LFP batteries, as they are more price-competitive than nickel cobalt manganese (NCM) batteries. As LFP batteries are hard to recycle, they are considered less eco-friendly, so Korean authorities offer fewer incentives for EVs with that type of batteries.

Kim expects the Atto 3 to generate a noteworthy sales outcome here, as its quality has already been proven abroad with accumulated sales of more than 1 million vehicles.

"BYD Korea will not focus on increasing its sales margin, but place a more strategic importance on clearing away its weak brand perception here," Kim said. "As the vehicle is already recognized for its quality and price-competitiveness abroad, there stands a huge possibility that more Korean customers will purchase the vehicle on the word-of-mouth effect."

A major domestic rival for the Atto 3 is Kia's EV3. Its price tag starts from 39.95 million won, up by 21 percent from the model of the Chinese carmaker.

BYD's potential success may spark a mass influx of other Chinese carmakers into the Korean market.

Zeekr, a Chinese premium EV maker, is also scheduled to debut here sometime as early as the end of 2025, and expectations are the company will start selling its EV models next year.

Industry officials argued that Chinese EV makers boast world-class tech prowess, so their rivals doing business in Korea should never disregard their expansion here.

Kia's EV3 compact electric SUV / Courtesy of Kia

"If BYD Korea succeeds in achieving a surprising number of vehicle sales in its first year of operation, this will come as a wake-up call for not just home-grown EV makers, such as Hyundai Motor and Kia, but other mid- to small-tier import carmakers doing business here," an official from a domestic carmaker said.

If BYD Korea clinches a decent sales performance and increases its market share to a satisfactory level, it will eventually raise its price to ensure its profitability just like in its other sales territories, according to the official.

"BYD's inroad into Korea is also well-timed due to the country's leadership vacuum triggered by the imprisonment of impeached President Yoon Suk Yeol, as the carmaker is less likely to be a target of regulation under the ongoing political turmoil," the official said.

But this will pose a downside risk to domestic carmakers, at a critical time when they have to defend against a possible subsidy cut and increased tariffs from the United States under the incoming Donald Trump presidency, the official added.