Massive pullout of Korean investors from Tesla
For years, Korean retail investors have been behind Tesla, contributing significantly to the company’s global stock market surges. However, in August 2025, Korean investors withdrew a whopping $657 million from Tesla stock, the largest monthly outflow in over two years.
The withdrawal of investments extends beyond direct stock investments. Leveraged products linked to Tesla, such as the 2x leveraged exchange-traded fund (ETF), TSLL, saw outflows of $554 million in August 2025, the largest since early 2024.
For retail investors who previously boosted Tesla’s gains, this sell-off reflects a significant decline in enthusiasm. It signifies more than just financial figures, pointing to a shift in investor confidence, diminishing trust in the electric vehicle (EV) company’s future and a growing interest in alternative investment opportunities, such as US-listed cryptocurrency firms.
This shift is striking, given that Korean investors still hold around $21.9 billion in Tesla shares, which remains their largest foreign equity holding. While this does not erase their long-term commitment, it highlights growing uncertainty about Tesla’s future direction.
Did you know? South Korea-based exchanges such as Upbit and Bithumb process billions daily, making Seoul a hub for global crypto liquidity.
Why Korean investors pulled out of Tesla
Korean investors are pulling out of Tesla after years of loyalty due to concerns about the company’s direction and other reasons.
- Missed promises: Tesla has often failed to deliver on bold deadlines. For instance, Musk promised 1 million robotaxis by 2020 and widespread full self-driving (FSD) capability, but years later, the technology remains in beta. Similarly, the long-delayed Cybertruck only began deliveries in late 2023, years behind schedule. The next-generation Roadster, which was to be launched in 2020, could now roll out in 2025.
- Political fallout: Musk’s frequent interventions in US politics and social life, including a public fallout with President Donald Trump and polarizing comments on social issues — cast a shadow on his credibility. His entry into government and the swift, unceremonious departure seem to have further eroded his reputation in some circles.
- Declining sales: In Q2 2025, Tesla’s deliveries globally plunged 13%-13.5% year-over-year, delivering around 384,122 units compared to 443,956 in Q2 2024. In Europe, July 2025 sales dropped 40% year-over-year, with Tesla delivering just 8,800 cars. The company’s year-to-date sales dove 34%, and market share in EVs went down from 11% to 5%.
- Rising competition: Chinese automakers like BYD, Nio and XPeng, alongside European giants like Volkswagen, are offering cheaper, feature-rich EVs. The arrival of these alternatives in the market has also affected Tesla’s dominance. For instance, BYD tripled its July sales in China to around 13,500 units, compared to 8,800 units of Tesla. Similarly, XPeng delivered 37,709 units in August 2025, a 168.7% year-on-year increase. Nio also garnered record deliveries as well, with 31,305 vehicles, up 55.2% YoY. BYD emerged as the leader, selling 373,626 EVs in August and over 1.1 million EVs in Q2 alone, nearly three times Tesla’s Q2 deliveries of 384,122 vehicles.
- Unpredictable leadership: Musk’s abrupt shifts, buying Twitter (now X), prioritizing AI projects over EVs and sudden management shakeups may have created uncertainty around Tesla’s focus.
Did you know? Nearly one in five South Koreans now invests in digital assets, with adoption climbing to over 25% among people aged 20-50.
Shift of Korean investors from Tesla to crypto
South Korean retail investors, known for their well-informed investments in global stocks, are now turning their attention to cryptocurrency-related stocks. This shift has become unmistakable as of September 2025, indicating a new direction for Korean investment abroad.
By the middle of 2025, South Korean investors had invested over $12 billion in US-listed cryptocurrency companies. The scale and speed of this investment wave demonstrate how Korean traders, often called “fearless retail,” are embracing cryptocurrency as both a growth opportunity and a safeguard against declining confidence in traditional stocks like Tesla.
August 2025 highlighted the intensity of this shift. Investors allocated $426 million to Bitmine Immersion Technologies, a company closely linked to Ethereum’s growth. Circle, the issuer of USDC (USDC), received $226 million, while Coinbase, the largest cryptocurrency exchange in the US, attracted $183 million in Korean investments.
Even high-risk products saw strong demand, with a 2x leveraged Ether ETF drawing $282 million in the same month, reflecting…
cointelegraph.com