Protecting Local Industry, Japan Puts the Brakes on EV Incentives for China

JAKARTA, KOMPAS.com - The Japanese government has officially tightened subsidies for all four-wheeled electric vehicles (EVs), directly impacting foreign manufacturers such as BYD.

Subsidies for the Chinese EV giant are now only 150,000 yen, approximately Rp15 million. This figure has dropped significantly from the previous range of 350,000 to 400,000 yen, equivalent to Rp35-40 million.

Cited from Carscoops, this adjustment accompanies a subsidy scheme shift that places greater emphasis on the use of local components, particularly batteries.

This situation puts BYD in an even more pressured position, as it still relies on batteries from its home country.

In contrast, local manufacturers continue to benefit. Toyota’s bZ4X receives subsidies of up to 1.3 million yen, about Rp130 million, while Nissan’s Ariya is around 1.29 million yen or Rp129 million.

Nevertheless, interestingly, Tesla receives incentives of about 1.27 million yen or Rp127 million, linked to its use of batteries from Panasonic.

A similar situation applies to European brands like Audi and South Korean manufacturers such as Hyundai, which have enjoyed subsidy increases.

However, the Japanese government has assured that part of these incentives are temporary and will be adjusted again starting next year.

President of BYD Japan, Atsuki Tofukuji, acknowledged that this disparity makes competition increasingly tough.

With the widening gap in incentives compared to manufacturers like Toyota Motor Corporation, BYD’s room to manoeuvre in the Japanese market is expected to become more limited, especially amid the still low penetration of electric vehicles in the country.