TOKYO - Automakers are stoking a fierce price war in Japan's EV market, with Chinese manufacturer BYD leading the charge by introducing fully electric vehicles priced around 2 million yen at Aeon stores. U.S. rival Tesla is also pushing price cuts for its core models, while Japanese giants Toyota and Nissan are responding by lowering prices on improved models with extended driving range.
Industry experts say the escalating competition reflects a shift in strategy as companies seek to maintain momentum in a cooling market. Yoshirō Tsuruhara, head of research firm Auto Insight, says that while aggressive discounting can stimulate demand, profitability pressures will intensify. The battle, he notes, will likely hinge not just on price, but also on how well manufacturers can differentiate through technology, range, and brand strength.
The rivalry between Toyota and BYD is now playing out most intensely in the numbers, where small but significant shifts are beginning to signal a change in the balance of power. Toyota still overwhelmingly dominates Japan’s domestic market, selling roughly 1.99 million vehicles in the fiscal year ending March 2025, a figure essentially unchanged from the previous year. Yet in the fast-growing all-electric segment, BYD’s rapid ascent is drawing attention. The Chinese newcomer sold 2,223 EVs in Japan in 2024 — a 54% jump from the year before — narrowly surpassing Toyota’s 2,038 electric units. For an automaker that only entered the market in 2023, this symbolic victory is reshaping industry conversations. “We’re not just here to participate,” a BYD Japan executive said recently. “We’re here to lead the transition to electric mobility.”
Toyota, for its part, is far from standing still. The company’s hybrid lineup continues to deliver strong results, and certain models are seeing dramatic gains. Its compact crossover, the Raize, posted a 390% year-on-year surge in sales in June 2025, briefly threatening the Yaris Cross for the top spot among domestic models. Across the broader market, Toyota captured more than 30% share of new car sales in May 2025, when total sales rose 3.7% year-on-year to 324,064 units. Company executives say they are focused on “a balanced approach” that meets consumer demand for hybrids and increasingly for EVs. “We believe electrification is a marathon, not a sprint,” one Toyota spokesperson remarked, emphasizing the firm’s ongoing investment in solid-state battery development and charging infrastructure partnerships.
Meanwhile, BYD’s footprint, though still small in absolute terms, is expanding quickly and strategically. Its May 2025 sales in Japan reached 416 units — more than double the figure from the same month a year earlier — with the newly launched Sealion 7 electric SUV accounting for the majority. The company’s decision to sell vehicles directly through retail spaces like Aeon malls is helping it reach mainstream consumers, many of whom are buying EVs for the first time. The growing presence of BYD and other foreign entrants is forcing Japan’s traditional carmakers to move faster than planned. While Toyota remains the undisputed leader for now, the contest is no longer just about who sells the most cars — it’s about who defines the future of Japan’s automotive industry.
Source: テレ東BIZ
