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In 2025, approximately *** percent of passenger cars sold in Japan were battery electric vehicles (BEV), increasing compared to the previous year. BEVs remain less attractive than hybrids or gasoline cars for Japanese customers, despite subsidies issued by the government.

The Government wants new cars to be electrified

Since Japan has vowed to become carbon-neutral by 2050, electric vehicles have become a necessity for the country to meet these targets. Japan is a leading emitter of greenhouse gas emissions, and automobiles account for a significant share of them. Against the backdrop of the overall target, the Government announced that by **** all new passenger cars sold domestically should be electrified, creating expectations for the growth of electric vehicles in Japan. However, the policy outline gives the automotive industry and consumers leverage, for example, including standard hybrids in this definition.

What is the Japanese industry’s stance?

Japanese manufacturers have been more timid with the introduction of fully electric vehicles, compared to many international competitors. This is especially true in the domestic electrified vehicle market, where consumers continue to prefer hybrid electric vehicles over other next-generation vehicle types. Industry leader Toyota has taken a flexible approach to the task of electrifying the automobile industry, continuing to develop and sell hybrid electric vehicles (HEV) with great success, domestically and abroad.