A man views China's Hongqi E-HS9 smart electric SUV in Tel Aviv, Israel, on April 14, 2022. (Photo by Gil Cohen Magen/Xinhua)
The world's fourth-largest automobile sales market has a significantly low EV penetration rate. In 2022, EV sales in Japan accounted for only 1.7 percent of the total sales of new passenger cars, lagging behind China's 19 percent and Europe's 11 percent, data showed from a report by auto consultancy and data provider LMC Automotive.
by Tsuguo Nobe
Chinese electric vehicles (EVs)'s entry into the Japanese market will benefit Japan by boosting the development and transformation of its domestic auto industry.
On Jan. 31, China's leading EV manufacturer BYD started to sell its electric sports utility vehicle ATTO 3 in Japan, marking the first step of a full entrance into the Japanese passenger car market.
This should be welcomed. With limited local EV choices and growing attention paid by Japanese consumers to the overseas trend of automobile electrification, sales of ATTO 3 in Japan will be impressive, despite Japanese consumers' strong loyalty to domestically made cars.
BYD's EV strategy is in line with rising global demand, and its advanced technologies and manufacturing techniques cultivated over the years will surely lead to its strong sales in Europe and Southeast Asia.
In 2022, the company delivered nearly 1.87 million units in 2022, up 152.5 percent year on year, according to the latest data.
People experience a BYD Tang electric car during a media preview of the 100th Brussels Motor Show in Brussels, Belgium, Jan. 13, 2023. (Xinhua/Zheng Huansong)
The world's fourth-largest automobile sales market has a significantly low EV penetration rate. In 2022, EV sales in Japan accounted for only 1.7 percent of the total sales of new passenger cars, lagging behind China's 19 percent and Europe's 11 percent, data showed from a report by auto consultancy and data provider LMC Automotive.
There is no doubt that the EV market will gradually expand in Japan due to global competition and cooperation.
At least within the next 15 years, EVs will occupy a significant share of the Japanese auto market and Japanese auto companies may face mounting risks of sales decline and operational difficulties if they remain reluctant to accelerate EV research and development.
Japanese people rarely change their ideas spontaneously, but rather tend to adapt to external factors. The market acceptance of Chinese home appliances over Japanese products has happened in part because Japanese companies could not stop developing high-cost products that exceeded market needs, and people simply preferred to choose Chinese specifications.
The same would happen in the EV market. The earliest Japanese EV buyers will form an influential trend, driving up local purchases of safe and affordable Chinese EV models. Such a trend is expected to broaden the market for high-end and luxury Chinese EVs.
The entry of Chinese EVs into the Japanese market would act as a stimulus for the Japanese auto industry to expand further and nurture battery businesses so as to cut future battery imports from overseas.
In recent years, the Chinese new energy vehicle industry has seen rapid growth, and is one of the reasons why Chinese EV enterprises are gaining an advantage in the race resides in China's manufacturing capabilities.
Photo taken on Jan. 10, 2020 shows the London EV Company (LEVC)'s electric taxi model TX in Tokyo, Japan. Chinese automaker Geely's subsidiary London EV Company (LEVC) brought the electric version of its iconic black cabs to Tokyo, aiming to help promote green public transportation in Japan. (Xinhua/Du Xiaoyi)
At the top level, China laid out a plan to become a powerful automobile nation about 20 years ago, eyeing the EV market much earlier instead of competing with the United States, Japan and European countries with edges in internal combustion engines.
Foreign-funded auto companies also started to produce in China, such as Tesla's Gigafactory in Shanghai, amid efforts to optimize foreign investment policies in the EV sector.
Against such a backdrop, Japanese automobile enterprises should continue to strengthen the cooperative relationship with their Chinese counterparts.
Editor's note: Tsuguo Nobe is a visiting professor at Japan's Nagoya University.
The views expressed in this article are those of the author and do not necessarily reflect the positions of Xinhua News Agency.■
