How are Chinese-made electric vehicles reshaping the automotive markets in South Korea and Argentina through fleet deals and retail expansion, what market share have they achieved, and what structural risks do these markets face from their dependence on Chinese imports?

South Korea

Chinese-made EVs captured 35–40% of South Korea's EV market in H1 2026, driven by aggressive fleet deals and a fast-growing retail presence, but a sudden subsidy policy shift in July 2026 and surging auto-parts dependence have created structural vulnerabilities.

Fleet deals and retail expansion

• Fleet strategy: South Korea's top car-sharing operator plans to expand its Chinese-built EV fleet from roughly 200 vehicles to about 1,100 by year-end 2026, following the same fleet-driven playbook Chinese brands have used in other markets .
• Retail growth: Chinese brands including BYD (entered January 2025) and Zeekr are opening dealership networks and competing directly with Hyundai-Kia on price and technology. BYD quickly became South Korea's fourth-largest imported-car brand .
• Tesla factor: About 51,853 of the China-made EVs sold in H1 2026 were Tesla Model Y units built in Shanghai, but Chinese-brand EVs alone (excluding Tesla) also gained meaningful share .

Market share achieved

• H1 2026: 69,513 China-made EVs registered — a 178.7% year-on-year increase, lifting share of new EV registrations to 35% (up from 26.8% in H1 2025) .
• One report using a slightly different methodology (including some non-passenger vehicles) pegs the share at over 40% .
• Full-year 2025: 74,728 China-made EVs sold, a 33.9% market share .
• Imported-car crown: China-made vehicles (ICE + EV) captured 41.2% of South Korea's total imported-car market in H1 2026, overtaking Germany for the first time .
• This marks a rapid rise from just 4.7% in 2022 .

Structural risks from Chinese import dependence

• Subsidy cliff: In July 2026, South Korea tightened EV subsidy rules, temporarily disqualifying new BYD and Zeekr models from purchase incentives — a direct policy response to the surge .
• Auto parts dependency: Imports of Chinese auto parts hit a record $1.439 billion in H1 2026, increasing reliance that hurts domestic suppliers .
• Strategic influence expansion: Chinese carmakers are moving beyond vehicle sales into strategic investments and critical supply-chain positions, deepening what analysts call "Korea's China dilemma" .
• Domestic industry pressure: KAMA's chairman warned that without production incentives matching those of China, India, and the US, South Korea could cede EV leadership entirely . Domestic EV share has already fallen from 75% to 57.2% .
• Geopolitical risk: The Bank of Korea flagged that China-made vehicles now represent the largest share of imported cars, surpassing Germany, and the concentration poses risks amid trade tensions .

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Argentina

Chinese EVs have reshaped Argentina's market from near-zero to a dominant force in under two years, enabled by President Milei's tariff-free import policy, but this has triggered a collapse in local manufacturing and created acute structural dependency risks.

Retail expansion and fleet deals

• Tariff-free entry: Milei's government lifted import tariffs on EVs and hybrids, allowing up to 50,000 units to enter duty-free in 2026 — a policy aimed at crushing inflation and opening the protected market .
• BYD's rapid ascent: BYD launched sales in Argentina in late 2025 and vaulted into the top 10 car sellers overall in South America's second-largest economy within its first year .
• Mass shipments: In January 2026, the first dedicated Chinese EV cargo vessel unloaded over 5,800 EVs and hybrids at Zárate port, a scale unprecedented for Argentina .
• Chinese EV imports hit a five-year high in 2026, lowering car prices significantly .

Market share achieved

• Collapse of local production: The share of locally manufactured new cars sold in Argentina fell from 65% in the first five months of 2023 to just 34% in the same period of 2026 .
• Import surge: The share of cars imported from outside South America climbed to 25%, with China the fastest-growing source .
• China has become Argentina's third-largest source of imported cars, with the trend accelerating sharply in 2026 .
• Exact EV-only market share figures are not yet published, but the broader displacement of local production is dramatic.

Structural risks from Chinese import dependence

• De-industrialization risk: The local auto manufacturing base is shrinking rapidly — 65% domestic share in 2023 vs. 34% in 2026 — threatening jobs, supply chains, and industrial capacity .
• Policy reversibility: The tariff-free quota is a government decree, not a treaty commitment, making the entire market structure vulnerable to a single policy reversal by a future administration.
• Geopolitical friction: Milei's pro-US, anti-China rhetoric during his campaign has given way to a pragmatic embrace of Chinese EVs, creating tension with Washington. US officials have pushed Buenos Aires to reduce economic ties with Beijing .
• Asymmetric dependency: An academic analysis found that Argentina's model reproduces "asymmetric dependencies and extractivist logics" in its economic relationship with China, even as it pursues energy transition goals .
• Cyber and data security concerns: Connected Chinese EVs raise potential cybersecurity and data-sovereignty risks that importing democracies are only beginning to address .