Japan Raises EV Subsidy Cap, Putting BYD at Competitive Disadvantage

Japan’s Ministry of Economy, Trade and Industry (METI) recently revised its “Subsidy Program for the Introduction and Promotion of Clean Energy Vehicles,” raising the subsidy cap for battery electric vehicles (BEVs) by 400,000 yen to 1.3 million yen (approximately RMB 56,000), while reducing subsidies for fuel cell vehicles. The adjustment, made in line with the Japan-U.S. tariff agreement, aims to create a level playing field. Subsidy amounts are determined based on evaluations of vehicle performance and manufacturers’ charging infrastructure development (scored out of 200 points). However, BYD’s models sold in Japan continue to receive subsidies ranging only from 350,000 to 450,000 yen (approximately RMB 15,200–19,500)—significantly lower than those granted to domestic brands like Toyota, with a gap as wide as 1 million yen. Atsuki Tofukuji, President of BYD Japan, expressed dissatisfaction, questioning whether the evaluation criteria are biased based on a company’s nationality, and called on the government to provide clear explanations. The revised subsidy policy applies only to purchases made between January and March 2026. If BYD’s subsidy levels are not increased thereafter, its market competitiveness in Japan will face further constraints.