Electric Vehicle Sales in Japan Continue to Decline in July Due to Weak Demand for Kei Cars

Japan’s EV Market Continues Decline

Japan’s domestic electric vehicle (EV) market continued to decline in July, with sales dropping 20% compared to the same month last year. This marks the ninth consecutive month of year-on-year decline in Japan’s EV market, reflecting a weakening interest in kei electric vehicles among consumers.

According to preliminary data from the Japan Automobile Dealers Association, the Japan Mini Vehicles Association, and the Japan Automobile Importers Association (JAIA), total EV sales in July reached 5,072 units. While this figure represents a slight increase of 1.2% compared to June, the overall EV market share within Japan’s passenger car segment fell by 0.5 percentage points year-on-year to 1.5%.

Kei Car Sales Plunge, Contributing to Overall Downturn

The primary cause of this decline was a sharp 35% drop in sales of kei cars. The Nissan Sakura, which accounts for over 90% of Japan’s kei EV sales, saw its sales plummet by 32%, significantly contributing to the overall downturn. Kei cars, defined by specific size and engine capacity criteria, remain a popular choice among domestic consumers in Japan.

Regular Passenger EVs Show Modest Growth

In contrast, sales of regular passenger EVs showed a modest recovery, rising by 1.2% year-on-year to 2,710 units. This marks the first year-on-year growth in this segment since November 2023, driven by the continued popularity of imported EVs in the Japanese market. Foreign EV sales have increased for five consecutive months, with July’s figures rising 28% to 1,689 units.

Outlook for Imported EVs Remains Positive

A JAIA spokesperson noted that unlike the global EV market, where demand for high-end models has slowed, Japan’s imported EV market remains robust and is expected to continue its upward trend, particularly among high-income consumers.