SEOUL, Aug 18 — The recent fire involving a Mercedes-Benz electric vehicle in Incheon that destroyed more than 140 cars and sparked proposals to restrict EVs' access to underground parking lots — has sparked a mass sell-off of EVs in South Korea.

The incident on August 1, has seen the market has been flooded with used EVs, according to K Car, Korea’s second-largest used car trading platform, with an 184 percent increase in used EV listings in the first week of August compared to the final week of July, reported Korea Herald.

The Mercedes-Benz EQE series, which includes the standard EQE 300, the EQE 350+ — the exact model involved in the fire — along with its high-performance AMG counterpart and the EQE SUV, has been especially hard hit with over100 EQE models listed on SK Encar, Korea’s top used car trading platform, pushing the total number of EQE vehicles for sale to 115 as of Friday.

This has resulted in prices for the luxury electric vehicles taking a nosedive.

EQE models typically sold for 60 million won to 70 million won (RM197,000 to RM230,000).

Pre-owned 2023 EQE 300 models listed as low as 59 million won (RM194,000), a significant drop from their original selling price of 92 million (RM302,000).

The fallout from the Incheon fire is exacerbating an already tough year for EV makers in Korea with automakers now rolling out aggressive promotions to counter the growing consumer reluctance to buy EVs.

Hyundai Motors recently started offering significant discounts including up to 5 million won (RM16,4000) off the Kona Electric and a 10 percent discount on the popular Ioniq 5.

Genesis, Hyundai’s luxury brand, is offering up to 5 percent off all models, including the GV70 Electrified.

Import automakers are also feeling the pressure with BMW is offering discounts of over 12 percent on its flagship electric models, the i7 and iX, while Audi has gone even further, offering nearly 30 percent off its e-tron models, including the high-performance RS versions.

Despite the deals, some buyers who had already placed orders for new EVs are now even canceling them.

Then there's the additional worry of new regulations that could make owning an EV more cumbersome, like restricting their use in underground parking lots due to fire risks.

Korea last year was the only major market among the US, Europe and China to experience a decline in EV sales.

The Ministry of Land, Infrastructure, and Transport and automobile market tracker Carisyou, reported that the country sold 1.625 million EVs in 2023, down 1.1 percent from the previous year.

The decline has persisted into 2024, with EV registrations from January to July falling by 13.4 percent year-on-year.