Everyone knows about Tesla, the small startup that grew to become a contender in the automotive industry, challenging the likes of Ford and GM. But would this be possible in Korea? With big automotive giants like Hyundai, can a small startup in the automotive industry even stand a chance?
The only automotive startup that Seoul Space has even heard about was back in 2015 when a very small startup called Cony Motor Co. showed up at the Seoul Motor Show. The company didn’t even have a factory to a single buyer. Yet they spent all their marketing money on a stand that was next to Bentley. That is when they got some kind of exposure. They weren’t able to get the investors or potential partners they needed but the idea and strategy was very ambitious and show what kind of lengths startups in the automotive industry has to go through in Korea.
It took Tesla 13 years to become a player in the U.S. auto industry. Tesla’s market capitalization reached $51.17 billion this year compared to $51.1 billion by GM and $45.1 billion by Ford. Korean startups in the automotive sector need to learn from Tesla’s business model. Cony Motor Co. had the right idea. Their trucks were eye catching and old school. They were two-seater trucks that used diesel and started at around $8,000. They also provided the option of an all-electric model that would start at $15,000. This should have been their focus.
Silicon Valley has been looking for a revolution in transportation. This is why innovation in autonomous vehicles as well as on-demand automobiles like Uber have found great success and support. Even Naver has started looking into diver-less cars. A team at the Seoul National University has started to build self-driving cars called SNUber for a few years now. They are looking to start testing later this year. So Korea overall is more interested in autonomous vehicles and on-demand services…not so much electronic vehicles. This is where a Korean startup can find a niche. Tesla was able to pass GM and Ford mainstream car market because of their upcoming launch of the Model 3 which will be $35,000 entry level electric car. The Model 3 was able to travel from New York to Washington on a single charge. Tesla’s business model shows how much things have changed in evaluating corporate value. A Korean startup that focuses on a clean electric automobile that is cheap will surely find success. While the big corporations are busying perfecting autonomous driving, there is an open window for startups to grab a hold of the electric automobile sector. Tesla only had 3 car models, that is it. Tesla has shown that the future of the automotive industry is in electric cars, so who will be the “Tesla” of Korea?