That explains the motivation to rapidly expand exports. It doesn't explain the ability to do so. I will be looking at issues of pricing and export destination. Lots of emerging markets have low motorization rates but are growing. They want inexpensive good cars. From what I've read, production subsidies are no longer a huge factor in price and most exports are by the leading companies. I'm glad to see your interest. Please consider upgrading to a paid sub,
I have been in a Chinese EV in Thailand. It was a taxi and from a brand I had not heard of and did not recognize. The boss (American) and I referred to it as a Temu Tesla because it seemed to be trying to copy Teslas, but very much on the cheap. We had significant issues communicating with the driver in general so asking her how the car worked would have been impossible, however my guess is that after a year as a taxi it will look very worn out with bits falling off the trim. As it was the large screen was not straight and we could see some of the wiring between it and the dashboard
Oh, so they got rid of the mechanical engineer and put an internal bean-counter in charge. Ayayay.
Would say plug-in hybrids still have a couple decades of good market though. And internal combustion engines may be the only tech where Chinese companies will not eat everyone's lunch. So may not be such a bad bet.
Thanks for putting this challenge into a global perspective. Word on the street in Japan is that Japanese automakers are investing heavily in next-generation solid-state EV batteries, which are expected by 2030 and should be a game-changer. I suspect this is why Toyota has been holding off.
That's like fusion power. No matter what year you ask, it's only 2-4 years away. This has been going on since the early 2020s. Meanwhile, Chinese makers say they are going to launch a model and put it on the road this year. I wrote about and should check on the status. https://richardkatz.substack.com/p/chinese-automakers-pioneering-technology?utm_source=publication-search. The street should take these promise with large grains of sald. Thanks for letting me know.
Yes, the timeframe does seem to be perpetually pushed back. However, even the EV kei cars in Japan still command a price premium, which BYD may soon destroy. In any case, a used (demo or dealer model) HEV kei-car with low mileage is substantially (roughly half-price) cheaper than the brand-new BEV kei-cars currently being rolled out.
First, it is important to make an "apples to apples" comparison within the same category.
Currently, BYD has one battery electric vehicle (BEV), the Dolphin, in the "compact hatchback" category with a list price of around 2.9 million JPY. However, that price should be taken with a grain of salt, as many "options" are not actually optional. Thus, the actual price of a brand new Dolphin is likely over 3 million JPY.
The following BEVs currently for sale in Japan also fall into the "compact hatchback" category:
- Nissan Sakura (MSRP of 2.6–3.1 million JPY)
- Honda N-ONE (MSRP of 2.7 million JPY)
- Mitsubishi eK X-EV (MSRP of 2.6–3.2 million JPY)
It's safe to say that the final price of all these cars is probably around 3.2–3.5 million JPY, including various "options."
However, the "compact hatchback" segment is not the most important kei-car portion of the market. What really sells in Japan are "box-type" styles, which are larger than "compact hatchbacks."
Examples include:
The Honda N-BOX (ICE, MSRP of about 2 million JPY), the Daihatsu Tanto (Pseudo HEV, MSRP of about 1.8 million JPY), and the Suzuki Spacia (Pseudo HEV, MSRP of about 1.9 million JPY). A fully loaded version of each model probably costs about 2.2 million JPY brand new, including various "options."
From recent personal experience, I know it's possible to purchase a slightly used (demo or dealer model) with low mileage (e.g., <10 km) that's fully loaded for only about 1.7 million JPY. That's about half the price of the smaller BEV options currently on the market.
Incidentally, because the N-ONE BEV is so new, there isn't much of a used market yet. Also, 2 ~ 3 year old used Nissan Sakura models tend to be priced low because their batteries deteriorate after 2-3 years, depending on wear and tear. While they're fun to drive, they don't hold their resale value well.
However, the wild card is the planned pricing of the upcoming BYD Rocco, which is expected to compete directly with the "box-type" kei cars as a BEV. Estimates indicate an MSRP of only about 2.5 million JPY, which would be very competitive. Plus, they will be distributed by Autobacs, an aftermarket parts and service chain.
Professor Katz -- While the rough pricing I explained the other day seems about right, I did not address your original question about the effect of government subsidies.
As you know, calculating the actual value of the available subsidies is easier said than done, especially in Japan. Regarding the Honda N-ONE subcompact, note that the N-ONE e subsidy program combines national and local government incentives, substantially reducing the vehicle's effective purchase price. Japan's national CEV (Clean Energy Vehicle) subsidy currently provides up to 580,000 yen for eligible, privately owned N-ONE e: models, or a different LEVO subsidy is provided for certain commercial-use vehicles. Depending on where you live, this subsidy can be supplemented by prefectural or municipal EV incentives. For example, Tokyo residents may qualify for an additional ZEV subsidy of up to 900,000 yen, including an extra incentive for vehicles with vehicle-to-home (V2H) power supply capability. This reduces the total purchase cost by as much as 1.48 million yen.
Typically, buyers purchase and register the vehicle first, then submit an online subsidy application within one month of registration for the national CEV subsidy. Because these programs are funded by fixed annual budgets, applications are accepted only until the available funds are exhausted. The amount of the subsidy and the eligibility requirements vary by registration date and local government.
While this is a significant subsidy, I wonder if many buyers of brand new cars are willing to go through the entire application process to receive it. The process takes 6-10 weeks after car registration.
It is still unclear to what extent BYD's new Rocco model will be eligible for this sort of subsidy.
Interesting global market numbers. The Chinese automobile market is down 20% YoY in 1H2026 - https://xcancel.com/thinkercar/status/2076600609860645344#m
That probably partly explains why we are seeing Chinese manufacturers selling cars outside China extremely cheaply.
That explains the motivation to rapidly expand exports. It doesn't explain the ability to do so. I will be looking at issues of pricing and export destination. Lots of emerging markets have low motorization rates but are growing. They want inexpensive good cars. From what I've read, production subsidies are no longer a huge factor in price and most exports are by the leading companies. I'm glad to see your interest. Please consider upgrading to a paid sub,
I have been in a Chinese EV in Thailand. It was a taxi and from a brand I had not heard of and did not recognize. The boss (American) and I referred to it as a Temu Tesla because it seemed to be trying to copy Teslas, but very much on the cheap. We had significant issues communicating with the driver in general so asking her how the car worked would have been impossible, however my guess is that after a year as a taxi it will look very worn out with bits falling off the trim. As it was the large screen was not straight and we could see some of the wiring between it and the dashboard
Oh, so they got rid of the mechanical engineer and put an internal bean-counter in charge. Ayayay.
Would say plug-in hybrids still have a couple decades of good market though. And internal combustion engines may be the only tech where Chinese companies will not eat everyone's lunch. So may not be such a bad bet.
Thanks for putting this challenge into a global perspective. Word on the street in Japan is that Japanese automakers are investing heavily in next-generation solid-state EV batteries, which are expected by 2030 and should be a game-changer. I suspect this is why Toyota has been holding off.
That's like fusion power. No matter what year you ask, it's only 2-4 years away. This has been going on since the early 2020s. Meanwhile, Chinese makers say they are going to launch a model and put it on the road this year. I wrote about and should check on the status. https://richardkatz.substack.com/p/chinese-automakers-pioneering-technology?utm_source=publication-search. The street should take these promise with large grains of sald. Thanks for letting me know.
Yes, the timeframe does seem to be perpetually pushed back. However, even the EV kei cars in Japan still command a price premium, which BYD may soon destroy. In any case, a used (demo or dealer model) HEV kei-car with low mileage is substantially (roughly half-price) cheaper than the brand-new BEV kei-cars currently being rolled out.
How does the price or the Nissan Sakura with subsidies compare to BYD equivalent with low subsidies?
First, it is important to make an "apples to apples" comparison within the same category.
Currently, BYD has one battery electric vehicle (BEV), the Dolphin, in the "compact hatchback" category with a list price of around 2.9 million JPY. However, that price should be taken with a grain of salt, as many "options" are not actually optional. Thus, the actual price of a brand new Dolphin is likely over 3 million JPY.
The following BEVs currently for sale in Japan also fall into the "compact hatchback" category:
- Nissan Sakura (MSRP of 2.6–3.1 million JPY)
- Honda N-ONE (MSRP of 2.7 million JPY)
- Mitsubishi eK X-EV (MSRP of 2.6–3.2 million JPY)
It's safe to say that the final price of all these cars is probably around 3.2–3.5 million JPY, including various "options."
However, the "compact hatchback" segment is not the most important kei-car portion of the market. What really sells in Japan are "box-type" styles, which are larger than "compact hatchbacks."
Examples include:
The Honda N-BOX (ICE, MSRP of about 2 million JPY), the Daihatsu Tanto (Pseudo HEV, MSRP of about 1.8 million JPY), and the Suzuki Spacia (Pseudo HEV, MSRP of about 1.9 million JPY). A fully loaded version of each model probably costs about 2.2 million JPY brand new, including various "options."
From recent personal experience, I know it's possible to purchase a slightly used (demo or dealer model) with low mileage (e.g., <10 km) that's fully loaded for only about 1.7 million JPY. That's about half the price of the smaller BEV options currently on the market.
Incidentally, because the N-ONE BEV is so new, there isn't much of a used market yet. Also, 2 ~ 3 year old used Nissan Sakura models tend to be priced low because their batteries deteriorate after 2-3 years, depending on wear and tear. While they're fun to drive, they don't hold their resale value well.
However, the wild card is the planned pricing of the upcoming BYD Rocco, which is expected to compete directly with the "box-type" kei cars as a BEV. Estimates indicate an MSRP of only about 2.5 million JPY, which would be very competitive. Plus, they will be distributed by Autobacs, an aftermarket parts and service chain.
Hope this helps!
Professor Katz -- While the rough pricing I explained the other day seems about right, I did not address your original question about the effect of government subsidies.
As you know, calculating the actual value of the available subsidies is easier said than done, especially in Japan. Regarding the Honda N-ONE subcompact, note that the N-ONE e subsidy program combines national and local government incentives, substantially reducing the vehicle's effective purchase price. Japan's national CEV (Clean Energy Vehicle) subsidy currently provides up to 580,000 yen for eligible, privately owned N-ONE e: models, or a different LEVO subsidy is provided for certain commercial-use vehicles. Depending on where you live, this subsidy can be supplemented by prefectural or municipal EV incentives. For example, Tokyo residents may qualify for an additional ZEV subsidy of up to 900,000 yen, including an extra incentive for vehicles with vehicle-to-home (V2H) power supply capability. This reduces the total purchase cost by as much as 1.48 million yen.
Typically, buyers purchase and register the vehicle first, then submit an online subsidy application within one month of registration for the national CEV subsidy. Because these programs are funded by fixed annual budgets, applications are accepted only until the available funds are exhausted. The amount of the subsidy and the eligibility requirements vary by registration date and local government.
While this is a significant subsidy, I wonder if many buyers of brand new cars are willing to go through the entire application process to receive it. The process takes 6-10 weeks after car registration.
It is still unclear to what extent BYD's new Rocco model will be eligible for this sort of subsidy.
Reference URL: https://www.honda.co.jp/N-ONE-e/subsidy/
I probably need to rerun the sums I did here - https://ombreolivier.substack.com/p/why-japan-has-few-evs?r=7yrqz&utm_campaign=post-expanded-share&utm_medium=web
Sakuras and Hondas are definitely cheaper, and I've seen a few of them around. I think I've seen 2 BYDs in rural Japan (plus one in Hiroshima)