BYD struggles to crack Japan’s EV market

BYD, a Chinese company developing and manufacturing electric vehicles, made a grand entrance into the Japanese EV market more than two years ago, but has faced difficulty attracting customers.

This update came after the EV manufacturer shared its sales data from January 2023 to June 2025. According to the data, the company had only sold about 5,300 vehicles. 

This indicated that the automaker is struggling in the market even after adopting strategies such as opening its 45th sales location in Japan, introducing a competitive fourth EV model, and embracing plans to release an electric ‘kei’ car by late 2026.

Although its sales were disappointing and its efforts did not pay off, BYD has not yet lost hope. To boost its sales, the company now offers customers discounts. Based on the strategy, it gives out discounts of up to ¥1 million, which is equivalent to around $6,700. 

This can be combined with government subsidies to lower prices by as much as 50%. For instance, when one purchases the Atto 3, he or she will pay just under ¥4.2 million. Considering its advantages in the era of the recent crackdowns in the industry,  Chinese individuals have reportedly found this strategy appealing.

Foreign automakers encounter hardship in the Japanese auto market 

Tech analysts commented on the situation, acknowledging that BYD’s pricing strategy is unusual because, in recent years, Japanese automakers have hardly reduced their car prices. This has raised worries that Japan’s pricing strategy may fail despite the automaker solidifying its position as a leading EV brand in China. 

Tatsuo Yoshida, a Senior Auto Analyst at Bloomberg Intelligence covering the Japanese auto sector, further explained the situation, stating that the strategy could make first buyers feel like they got a bad deal for paying more, resulting in reduced resale values.

The challenges outlined have demonstrated the struggles of foreign automakers like BYD in the Japanese auto market. According to reports from sources, buyers are inclined to choose well-known brands such as Toyota Motor Corp. and usually prefer gas-electric hybrids instead of battery electric vehicles (EVs). 

This proves that Japanese car buyers are loyal to local firms, affecting major legacy brands. To illustrate this, General Motors Company had quit the Japanese auto market after experiencing poor sales. Additionally, Hyundai Motor Company is taking another shot after leaving the market in 2009.

For BYD, the mixed response in the Japanese auto market stands out when compared to the rising sales in the European market. Despite the challenges surrounding its operation, the company is still committed to expanding globally and addressing the challenges encountered in its homeland, China.

Yoshida calls on the urgency of making an  impression in the EV market 

Despite its short-term challenges, the Japanese auto market has long-term benefits that offset these challenges. According to reports from reliable sources, EVs are anticipated to make up only 3.4% of new vehicles in Japan in 2025; however, growth is predicted in the years to come.

In a statement, Yoshida emphasized that the main goal is to make an impression, not Japan. According to the analyst, what matters for BYD is that it may be recognized by some of the most demanding customers in the world.

“What they really want is a history of doing business in Japan with the most discerning quality customers, even if it does not make complete economic sense,” he said.

The company still has a long way to go before it can bite off chunks of the market share away from local Japanese companies. BYD sold 512 of all its models for June, compared to a top EV in Japan, Nissan Motor Co.’s Sakura, which sold 1,137. 

However, Yoshida highlighted that these sales figures are insufficient to pay employee salaries and keep showrooms operational. 

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