South Korea Investigates Safety Issues in Tesla Vehicles

South Korea revealed it is launching an investigation into Tesla vehicles, reported Reuters on Wednesday. Among the parts being investigated are the firm's braking and steering systems as well as the autopilot function, a transport ministry official said.

Meanwhile, South Korean media said Tesla’s Model 3 was being investigated in a process that might take anywhere from six months to a year. An official at Tesla's South Korean unit said the electric vehicle maker would cooperate with the probe.

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Tesla's main competitor in South Korea is Hyundai and rumors have it that the electric car firm's rise in the country has forced the local company to focus on electric vehicles rather than hydrogen.

An industry insider told Reuters that Tesla’s popularity has caught Hyundai by surprise. “Hyundai did not expect Tesla to dominate the EV market so quickly,” the source said. 

In June, Tesla had an impressive month that saw its Model 3 beat Hyundai’s Kona EV, as well as models from BMW and Audi. Now. Hyundai is rushing to compete.

An internal union newsletter acquired by Reuters explained that the South Korean firm intends to introduce two production lines dedicated to electric vehicles as early as next year. 

Hyundai also revealed that it was collaborating with local battery suppliers to scale up its electric vehicle production capabilities. In the meantime, it seems to be scaling back on hydrogen vehicles.

The firm only intends to produce two hydrogen vehicles by 2025 although it is still promoting its current models. What does all this mean for South Korea's local electric vehicle market?

It could indicate that Tesla will see some growing competition from local brands. The market may become more diversified as Tesla is currently dominating it. 

No matter what happens, Tesla first has to clear the hurdle of its current investigation. Time will tell how that develops.