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| Korea EV |
Eco-Friendly Vehicles Take Majority Share in Domestic Auto Market
Korea EV sales in July reached record levels, with eco-friendly cars comprising 55% of total domestic auto sales. This marks the highest monthly share in 2025 and signals a continued shift away from internal combustion engine (ICE) vehicles. According to South Korea’s Ministry of Trade, Industry and Energy (Motie), July’s total eco-friendly vehicle sales hit 76,600 units, up 52% year-on-year.
Battery electric vehicle (BEV) sales led the surge, growing 69% year-on-year and 26% month-on-month to nearly 25,600 units. Plug-in hybrids and hydrogen-fueled cars also contributed to the uptick. Despite an overall 5% month-on-month decline in domestic auto sales, eco-friendly models continued to outperform ICE vehicles for the third consecutive month.
In contrast, hybrid vehicle sales increased 43% year-on-year but slipped 4.7% from June. This divergence reflects evolving consumer preferences and stronger policy support for full-electric models.
Exports Slow, But Annual Growth Trend Persists
While Korea EV sales in July rose domestically, exports of eco-friendly vehicles declined 11% month-on-month, ending a growth streak since March. South Korea exported 68,100 eco-friendly units, still up 17% year-on-year. Analysts attribute the dip to weakened demand from the United States, the largest overseas buyer.
BEV exports reached 20,200 units, rising 12% year-on-year but falling 9.5% month-on-month. Hybrid exports were stronger, climbing 18% on-year to 43,700 units, though still down 11% from June. The softening in export volumes is partially due to logistics slowdowns and inventory adjustments abroad.
Nevertheless, South Korea’s total vehicle output in July stood at 316,300 units, up 8.7% year-on-year. But weaker US imports pushed total car exports down 13% from June to 211,900 units. Despite this, annual export growth remained positive at 5.8%.
Policy Support and Trade Deal to Boost Future Sales
The upward trend in Korea EV sales in July aligns with broader policy momentum. South Korea recently finalized a trade agreement with the United States on July 31. Under this deal, the US will cut tariffs to 15% in exchange for increased South Korean investment, potentially benefiting future auto exports.
Domestic incentives, coupled with rising hydrogen infrastructure and EV charging networks, continue to strengthen eco-vehicle adoption. Industry analysts expect further market share gains for BEVs and hydrogen fuel cell vehicles in the second half of 2025.
As a result, automakers may accelerate their raw material procurement for lithium, rare earths, and hydrogen-related components. Scrap processors and metal recyclers should also prepare for increased demand from Korea’s green automotive value chain.
ScrapInsight Commentary
The sharp rise in Korea EV sales in July reflects structural demand shifts and strong policy alignment. Slower exports are likely short-term, while domestic growth may drive upstream demand for battery metals and hydrogen systems. Scrap traders and recyclers should monitor BEV and fuel-cell production trends closely for sourcing opportunities.
