[THE INVESTOR] The entry of Tesla Motors’ more affordable electric vehicle into South Korea next year will boost domestic demand for EVs, an expert said on Aug. 29.

The US electric car maker is slated to unveil the Model 3 in late 2017, which is capable of traveling more than 340 kilometers before being recharged and is estimated to have a price tag of US$35,000, nearly half the price of its flagship and luxury Model S.

The Model 3 is reported to have clinched more than 300,000 preorders globally, garnering huge popularity among motorists.



In a report on the domestic EV market, Lee Hang-ku, a researcher at the state-run Korea Institute for Industrial Economics and Trade, said the Model 3 will likely spark domestic competition for electric cars and consumer interest.

“The launch of the Model 3 in South Korea is expected to contribute significantly to a boost of domestic demand for EVs,” Lee said. “It will also intensify competition among EV makers and pique consumer interest.

Tesla plans to launch its first South Korean dealership in a new shopping mall south of Seoul later this year in an effort to sell its globally famous EVs to local customers.

The expert, however, said Tesla will face some hurdles to its foray into the South Korea market, including on-time delivery of parts and poor related infrastructure in the country.

“The government should set up a control tower charged with nurturing the future automotive industry by providing comprehensive and systematic support,” he said.

According to Lee, South Korea’s automotive industry spends 6 trillion won on research and development per year, while comparable figures come to 40 trillion won for Germany, 25 trillion won for Japan and 12 trillion won for the United States.

(theinvestor@heraldcorp.com)