People inspect Tesla Model Y cars at a delivery center in Beijing, Thursday. AFP-Yonhap

Tesla's strong growth in Korea is now being threatened by a wave of competitively priced EVs from rivals like Volvo and Kia.

Tesla Korea became the nation's third-largest imported carmaker by sales last year, driven by the strong performance of its Model Y electric SUV, with 29,750 units sold in 2024, following BMW and Mercedes-Benz, which ranked first and second, respectively, according to the Korea Automobile Importers & Distributors Association.

Volvo Car Korea recently launched its much-touted EX30 compact electric SUV. Customers will be able to purchase the model at some 40 million won ($27,360) after subsidies, which the carmaker claims is the lowest price globally. The carmaker was the fourth-largest imported car brand last year after selling some 15,000 units, and it now seeks to surpass 3,000 sales this year, with the EX30 expected to play a key role.

Volvo Car Korea's EX30 subcompact electric SUV / Courtesy of Volvo Car Korea

Since Tesla's EVs are generally priced higher than those of its counterparts in the same segment, there's a good chance other legacy carmakers could steal the limelight this year with the launch of price-competitive EVs and hybrid cars.

Other EV makers, such as Kia, are also working to capture market share from Tesla and its rivals by diversifying their EV lineups with a focus on affordable, compact models.

Last week, the Korean carmaker unveiled its first compact electric sedan, the EV4, highlighting several key advantages. The vehicle can travel up to 533 kilometers on a single charge, the longest range among all EVs sold by Kia and its sister company, Hyundai Motor. It also takes only about 30 minutes to charge from 10 percent to 80 percent.

Kia's EV4 electric sedan is displayed at an exhibition hall in Seoul, Wednesday. Yonhap

Kia aims to attract customers who feel the financial strain of buying EVs. Most of Kia's compact EV models are priced lower than Tesla's flagship models.

"Up until recently, customers who were sensitive to prices had only a few options to choose from when purchasing EVs, but this is not the case anymore, as legacy carmakers here and abroad are seeking to attract more EV demand here by introducing affordable EVs," an auto industry official said.

Other carmakers, including Audi and Volkswagen, are also preparing to boost their sluggish sales with the planned launch of new EV lineups. Audi Korea is set to release the A6 e-tron, the electric version of its flagship mid-sized sedan, later this year.

Volkswagen Korea will also deliver its ID.5 coupe-version electric SUV here in the first half of this year. The vehicle is the second EV the carmaker has introduced to the Korean market.