Japan Overhauls EV Subsidies: BYD Cuts in Half, Toyota bZ4X Gets 10x Boost

Japan’s Ministry of Economy, Trade and Industry (METI) recently unveiled a revised subsidy program for new energy vehicles, effective from April this year and fully implemented by January 2027. Under the new scheme, subsidies for three BYD models sold in Japan—the Seal, Dolphin, and ATTO 3—have been sharply reduced from ¥350,000–¥400,000 to just ¥150,000, a cut of over 50%, making them the lowest-subsidized vehicles in the local market. In contrast, Toyota’s bZ4X qualifies for a subsidy as high as ¥1.3 million—nearly ten times that of BYD—and models from Nissan, Tesla, and other brands also receive significantly higher subsidies. Hiroki Tofukuji, President of BYD Japan, questioned the fairness of the evaluation system, noting that despite BYD’s active investment in fast-charging infrastructure, it received zero points in that category, while companies with no charging stations earned high scores. Japanese authorities stated that subsidy levels are determined based on a comprehensive scoring system for automakers. However, industry insiders speculate that the disparity may be linked to the Japan-U.S. trade agreement on tariffs, suggesting possible policy bias. Additionally, brands like Audi and Hyundai, which do not use Japanese-made batteries, have also seen their subsidies substantially slashed.