Japan Transition to Electric Vehicles

The Government of Japan (GOJ) recently set a target: by 2035, all new cars sold will be environmentally friendly.  In Japan, eco-friendly cars are called Clean Energy Vehicles, or CEVs, to differentiate from fossil fuel-based vehicles.  The GOJ is offering to subsidize part of the cost to purchase CEVs, such as Battery Electric Vehicles (BEVs), Plug-in Hybrid Electric Vehicle (PHEVs) and Fuel Cell Electric Vehicles (FCEVs).  The maximum amount of the CEV subsidies given per vehicle in 2021 is 800,000 Japanese Yen, which is about 7,200 US Dollars.  Although Hybrid Electric Vehicles (HEVs) are considered eco-friendly cars, these are not eligible for the CEV subsidy program.

According to the Japan Automobile Dealers Association (JADA), sales of new electric vehicles in 2020 reached close to 1.4 million.  New electric vehicles accounted for 36.2% of total new car sales, up from 35.2% in 2019, and 32.9% in 2017.  Japanese market demand for HEVs has been strong since the Toyota Prius was first introduced here in 1997.  In fact, 97.8% of the new electric vehicle sold in 2020 were HEVs, followed by PHEVs 1.1%, BEVs 1.1% and FECVs 0.1%.

Japan is transitioning to 100% electric car sales by 2035 and the Japanese electric vehicle market is growing. U.S. companies may find business opportunities in various areas related to electric vehicle such as, Lithium-ion Batteries, Solid-State Batteries, Battery Management & Analysis, Vehicle-to-Grid (V2G) Technology, End-Life Battery Technology, and Charging Infrastructure Development.

For further information, contact U.S. Commercial Service at Office.Osaka-Kobe@trade.gov.