BYD faces a sharp subsidy cut in Japan as new rules favor locally sourced batteries over imported ones
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by Brad Anderson
2 hours ago
- Japan cut subsidies for the Chinese EV maker to just 150,000 yen.
- New rules now favor EVs using locally produced battery packs.
- Toyota and Nissan models still qualify for far higher incentives.
Electric vehicles make up less than 2 percent of new car sales in Japan, yet that didn’t stop Chinese EV giant BYD from unveiling an all-electric Kei car last year, aiming to make inroads into the local market. However, the company has just been dealt a serious blow.
It has been revealed that the Japanese government has slashed subsidies for BYD by more than half, reducing them to just 150,000 yen, or about $936. Previously, incentives for BYD models ranged between 350,000 yen ($2,000) and 400,000 yen ($2,500).
Read: BYD Surprises Japan With A Tiny EV Ready To Take On The Kei Giants
The reason is quite simple. Japan is revising its EV subsidy scheme to benefit vehicles that use locally manufactured battery packs. Obviously, BYD’s cars use Chinese-made batteries. Thus, it seems more like a measure to protect the Japanese car industry from the burgeoning Chinese brand, which was the world’s sixth-largest car manufacturer last year.
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As part of a change to the subsidy program, the Toyota bZ4X will continue to be offered with the highest possible subsidy of 1.3 million yen ($8,100). The Nissan Ariya had been available with a 1.29 million yen ($8,075) subsidy, although this will be cut to 1 million yen ($6,200) in 2027.
Interestingly, it’s not just Japanese brands that get generous government assistance. Earlier this month, Tesla’s subsidies were increased by 400,000 to 1.27 million yen ($7,900), likely due to the fact that it uses Panasonic batteries. Audi also saw a recent increase of 320,000 yen ($2,000) up to just over 1 million yen ($6,200) for its EVs. Similarly, subsidies for some of Hyundai’s EVs have been boosted this month.
As noted by Nikkei Asia, not all of these subsidy increases will remain in effect. From next January, subsidies for brands including Audi and Hyundai will be cut, although their extent remains unclear. Prior to the most recent round of cuts, BYD said it was already at a disadvantage.
“We’re at an overwhelming disadvantage,” the boss of its Japan unit, Atsuki Tofukuji said. “The gap [with companies like Toyota Motor] has grown to up to nearly 1 million yen. We can’t compete with 350,000 yen.”
