Tesla self-driving launch raises market pressure on Hyundai, Kia

Hyundai Motor and Kia face a growing risk of losing EV market share, with Tesla’s much-touted Full Self-Driving (FSD) system now launching in Korea.

Tesla has introduced FSD for US-imported Model S and Model X vehicles, with about 900 EVs eligible.

China-made Model 3 and Model Y units are still awaiting safety certification.

The system is classified as Level 2, requiring drivers to stay attentive.

Tesla’s Model Y was the top-selling imported car in Korea in the first 10 months of 2025, with 30,800 units sold.

Kia has delayed its autonomous driving launch, and Hyundai remains behind in self-driving technologies.

GM’s Super Cruise is also entering the market on the Cadillac Escalade IQ, adding more competitive pressure on local automakers.

🧠 Food for thought

Implications, context, and why it matters.

FSD in Korea skips China-built Model 3 and Model Y, which need separate safety approval before rollout 1. Model Y led imported sales with 30,800 units over the first ten months of 2025, compared with about 900 US-made Model S and X that can use FSD now 2.
The Korea-US Free Trade Agreement lets US-built cars skip some local checks, which opens FSD to Model S and X right away 1. Korean sign-off for China-made models lacks a timeline, so near-term FSD uptake and product differentiation stay limited.

As Level 2 systems like FSD spread in Korea, telematics-based auto insurance can grow for insurers and mobility data vendors. Telematics means in-vehicle data sent by embedded hardware over cellular networks. The market could rise from $3.5 billion in 2025 to $19.3 billion by 2035 at an 18.5% compound annual growth rate (CAGR), with Asia-Pacific including South Korea seen as a region with rapid growth tied to urbanization and smart city projects 3.
South Korean auto insurers that pair ADAS with telematics data in usage-based insurance (UBI) can set dynamic premiums tied to driving behavior tracked by telematics or in-vehicle sensors 3. Driver monitoring system suppliers are providers of in-cabin cameras and sensors that assess driver attentiveness. Companies building telematics plus driver monitoring systems can map which Korean carriers already run UBI or telematics discounts to time partnerships and product integrations as 74% of new vehicles worldwide now include embedded telematics units 4.