BYD's Gamble to Lure Japanese Market with Kei Cars, Many Risks

KatadataOTO – BYD is taking a big step by introducing electric cars to the Japanese market, which is known to be difficult for Chinese manufacturers to penetrate.

In Japan, the majority of cars on the road are products of Japanese brands such as Toyota, Daihatsu, Mazda, and Suzuki.

Not many electric cars are seen. The most common type of electrified vehicle is the hybrid.

Additionally, small cars in the kei car segment are also a favorite among consumers in the land of the rising sun.

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This Japanese version of the Low Cost Green Car (LCGC) offers various advantages such as lower taxes and a compact size, making it suitable for urban use.

Seeing this opportunity, BYD is introducing its first kei car specifically for the Japanese market. Unlike most kei cars, this new model from the brand is electric-powered.

However, it is mentioned that in Japan, electric car sales during the first six months of 2025 were very low for one reason.

“Consumers do not have an urgent and strong reason to buy an Electric Vehicle (EV),” said Yasushi Yokoyama, a Senior Analyst at Aizawa Securities, as quoted from The Japan Times on Thursday (30/10).

The only small electric car with the highest sales there is the Nissan Sakura, which is still a domestically made product.

The Nissan Sakura is said to be the best-selling electric car in Japan for three consecutive years.

Besides the still-low consumer interest, the supporting ecosystem for electric cars is considered limited.

“The charging infrastructure is arguably developing, but it is still far from sufficient,” said Yokoyama.

To be able to compete, BYD needs to prepare several things, including a capable after-sales service.

This can convince consumers to buy Chinese-made cars.

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“If the price and specifications are attractive with comprehensive services, there is a possibility that BYD's small car could become popular,” Yokoyama affirmed.

For your information, the BYD Racco kei car debuted at the Japan Mobility Show 2025 with a price tag of 2.6 million yen (around Rp 275 million).

This is BYD's first product designed exclusively for a market outside of China as part of its vision to reduce carbon emissions.