Japan rediscovers battery-electric vehicles

TOKYO -- The Tokyo auto show has changed its name to the Japan Mobility Show but visiting the six halls of the Big Sight exhibition complex, one thing is clear: Japan has rediscovered battery-electric cars.

Japan is not a electric cars newcomer. The first global mass-produced BEV was the Nissan Leaf that went on sale in 2010.

Meanwhile, a the Mitsubishi i-MiEV minicar, a low-volume predecessor to the Leaf, was launched for fleet customers in Japan in 2009. It was exported to Europe and also sold as the Citroen C-Zero and Peugeot iOn.

Since those launches, Japan's electric car sales went into hibernation for more than a decade.

The share of electric passenger car sales in Japan grew to 1.3 percent in 2022 from 0.4 percent in 2021. It reached 1.7 percent through September, figures from financial analysts at Jefferies show.

The slow progress of BEV sales in Japan puts the country well behind China, where BEVs had a 23 percent share in the first nine months. Europe was at 15 percent and the U.S. at 7 percent, according to Jefferies data.

India is now ahead of Japan in BEV penetration with a share of 2 percent from January to September.

Even if sales of BEVs are not taking off in Japan, the world is turning electric and all the Japanese automakers need to embrace electric cars to be able to compete globally.

Toyota will launch its third step toward full electrification in 2026, beginning with a Lexus sedan that will be built using Toyota's renowned production system re-imagined for electric cars.

Nissan's electrification strategy will include extreme sports cars and family vans. Honda's BEVs will cover several sizes of minicars. Suzuki plans to reinvent its Wagon R microvan as a full-electric offering that was at the show by the eWX concept.

It will take some years to see if the revamped interest in BEVs will help Japanese automakers gain a significant market share globally, given that Tesla's sales are growing every year and Chinese automaker BYD is poised to pass Tesla this year as the world’s top-selling maker of electric cars.

These two BEV giants that will probably end the year by each selling about 1.8 million full-electric cars. To put this in perspective, Toyota, together with Lexus, was the world’s top-selling automaker last year with sales of 9.6 million vehicles, but BEVs accounted for just 25,000 of those sales.

What Japanese automakers will lack is significant uptake of BEVs at home, which will slow them from achieve economies of scale.

Last year customers in China bought 5 million BEVs, Europe was at nearly 1.6 million and the U.S. at 732,000 units, according to Jefferies. With 54,144 BEVs sold in Japan last year, the country's automakers will need to reach significant volumes abroad, starting in China and Europe, until customers in their home market decide to switch powertrains.