As a member of the R-N-M Alliance, the Japanese carmaker Nissan began selling the Nissan Leaf electric vehicle (EV) a decade ago and has become one of the world’s longest-selling battery electric vehicle (BEV) models. However, the Japanese government and automakers appear to be overly conservative in their stance on the development of the EV market compared to the other major auto industry powers and automakers. They strongly support hybrid cars as the most logical option for Japanese automakers and their auto market to transition from petrol cars to EVs. Therefore, Japanese carmakers have not been active in EV sales in recent years, and the development of the domestic EV market in Japan is relatively slow.
According to Researcher and Research LLC, Japan was the world’s fourth-largest auto market with 2.399 million passenger cars sold in 2021, just behind China with 20.857 million, the US with 14.936 million, and Germany with 2.622 million. Compared with other auto industry powers, Japan’s EV market is relatively small, and there is a significant gap with other major countries. For example, its sales volume of 43,917 units in 2021 was only 1.4% of the market size of China, 7.4% of the US, and 6.4% of Germany.
However, the booming global EV market in recent years has led Japanese automakers to realize that the trend toward EV is genuinely unstoppable, so they have abandoned their original strategies and announced plans for EV models and new plants. Among them, Honda Motor was the first carmaker to propose a blueprint for transformation. A series of EV sales plans by Japanese automakers, coupled with the Japanese government’s efforts to support EV, will be a solid boost to the development of the Japanese EV market.
According to Researcher and Research LLC, in January 2022, Japan narrowly edged Canada into the global top 10 EV sales countries and continued that momentum in February, among the top 15. Compared with the other top 10 countries, Japan still had the lowest EV and BEV penetration rates in the passenger car market, at 2.7% and 1.2%, respectively. Since December last year, the Japanese EV market has returned to being dominated by plug-in hybrid electric vehicle (PHEV) sales, which hit a recent high of 70.5% in January this year and dropped to 54.7% in February, as shown in figure 1.
Figure 1 Monthly EV sales in Japan
Japan’s EV market has long been dominated by Japanese automakers, including Honda Motor, Mazda, Mitsubishi and Nissan of the R-N-M Alliance, and Toyota Motor Corp., which had a combined market share of 68.5% in 2021. Still, it was a significant decline from 78.7% in 2020.
There were also significant changes in the monthly market shares among Japanese automakers since 2021, with Mitsubishi, Nissan and Toyota being each other’s main competitors, as shown in figure 2.
Figure 2 Monthly market share changes of EV OEMs in the Japanese EV market
If the EV market is divided into BEV and PHEV, it can be found that Nissan and non-Japanese automakers (mainly Tesla) dominated the Japanese BEV market, as shown in figure 3, while Mitsubishi and Toyota dominated the Japanese PHEV market, as shown in figure 4.
Figure 3 Monthly market share changes of EV OEMs in the Japanese BEV market
Figure 4 Monthly market share changes of EV OEMs in the Japanese PHEV market
Japan started the year as one of the world’s top ten EV sales countries, showing that the strength of auto power cannot be ignored. Despite the EV supply chain issues that have swept through the global automakers this year, the Japanese EV market reached 24.5% of the annual sales volume in 2021 from January to February this year. With the more aggressive launch and sales of EV models by Japanese automakers, significant growth in the Japanese EV market can be expected this year. Our current estimate for the Japanese EV market is 93,000 units in 2022, with an annual growth rate of 111.8%. For the full year, the Japanese market is likely to rank among the top 15 sales countries in the world.
Researcher and Research here defines EV as battery electric vehicle (BEV) and plug-in hybrid electric vehicle (PHEV), with passenger car as the primary purpose.