Japan's New EV Subsidy System: Tesla Maintains High Level, BYD Sees Significant Cut
Japan's new 2026 CEV subsidy system, implemented from April 1, has significantly adjusted EV subsidy evaluation criteria. China's BYD saw its subsidy drastically cut to 150,000 yen, while US-based Tesla maintained a high level of 1.27 million yen, sparking debate over the 'subsidy gap' in Japan.
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- 📰 Published: May 7, 2026 at 17:08
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Central News Agency
(Central News Agency reporter Dai Ya-chen, Tokyo 7th) Japan officially implemented the new 2026 CEV (Clean Energy Vehicle) subsidy system on April 1. After significant adjustments to the electric vehicle (EV) subsidy evaluation standards, China's BYD saw its subsidy drastically cut to 150,000 Japanese Yen, while US-based Tesla maintained a high level of 1.27 million Japanese Yen, sparking discussion in Japan about the 'subsidy gap'.
According to a report by Japan's WEEKLY PLAYBOY NEWS, the new system has a total budget of approximately 110 billion Japanese Yen. Ordinary passenger EVs can receive a maximum subsidy of 1.3 million Japanese Yen (approximately 260,000 New Taiwan Dollars), and light EVs a maximum of 580,000 Japanese Yen. However, the actual subsidy amount will vary based on the comprehensive evaluation of each car manufacturer.
Under the new system, most Japanese car manufacturers such as Toyota, Nissan, and Subaru maintained subsidy levels between 1.1 million and 1.3 million Japanese Yen; BYD, however, saw its subsidy drastically reduced from the original 350,000-450,000 Japanese Yen to a flat 150,000 Japanese Yen.
In contrast, Tesla, also a foreign brand, received similar subsidies to Japanese car manufacturers, drawing attention.
Automotive journalist Kenji Momota pointed out that CEV subsidies do not only consider vehicle performance but are evaluated based on the car manufacturer's overall commitment. The total score is 200 points, covering 6 major categories, including charging infrastructure, stability of battery and critical mineral supply, cybersecurity measures, and maintenance systems.
He stated, "Each car manufacturer will formulate strategies to achieve a high score. Although some companies are dissatisfied with the results, feeling they did not score as expected, they ultimately have no choice but to accept the judgment."
There is particular concern whether BYD has been subjected to 'discriminatory treatment'. However, a former editor-in-chief of an automotive professional magazine believes that the key difference lies in the level of investment in Japan's market infrastructure.
He pointed out that BYD's strength lies in its overwhelming price competitiveness. However, in terms of charging, it mainly relies on existing infrastructure, which does not align with the CEV subsidy's emphasis on 'corporate contribution to charging infrastructure'.
In contrast, Tesla has already built over 140 locations with approximately 700 'Superchargers' in Japan, thus receiving a higher evaluation score.
In other words, Tesla was highly evaluated as an 'infrastructure company' in the Japanese market. BYD was not treated discriminatorily, but the difference arose from varying 'contributions' to the Japanese market to date.
Currently, the scale of Japan's EV market is still limited. In 2025, new car sales in Japan are approximately 4.56 million units, of which EVs account for only about 60,000 units; in contrast, 'national cars' (kei cars) sold 1.66 million units, accounting for about 40%, showing a significant market size gap.
There are also voices of doubt in Japanese society regarding the government's continued strong subsidies for EVs. Manga artist Odawara Doragon, who once drove around Japan, said that although his first test drive in February this year felt quite comfortable, he would "probably still not want to buy one" if charging stations do not significantly increase.
He also questioned, "Why are only EVs given such preferential treatment?" believing that the government could re-examine or even abolish the subsidy system.
Japan is facing rising prices and mortgage interest rates, and most people are struggling just to maintain their daily lives, let alone the fact that EV subsidies are funded by taxes. Many believe that EV subsidies are actually more like a "privilege exclusively for high-income groups" who can afford expensive EVs.
On the other hand, the Japanese government's core goal in promoting EVs is still the 2050 carbon neutrality policy. However, with Europe and the US reviewing their EV policies, and rising energy security concerns due to the Russia-Ukraine war and escalating Middle East tensions, voices in Japan are also beginning to call for a re-examination of the EV subsidy system.
In the US, the Trump administration has successively withdrawn EV incentive policies from the Biden era; China, after canceling EV purchase subsidies, has shifted to price wars and low-interest loan competition, with car manufacturers like BYD continuously lowering prices to seize market share.
Japanese automotive industry insiders analyze that the Japanese government's 110 billion Japanese Yen subsidy aims not only to promote EV products themselves but also to view EVs as part of industrial infrastructure and reduce geopolitical risks dependence on rare metals and battery supply chains.
However, Kenji Momota believes that subsidies are unlikely to truly become a 'trigger point' for stimulating the market. This is because both consumers and dealers have already taken subsidies for granted, and "the truly frightening thing is that once subsidies are canceled, sales may instantly cool down."
In addition, the problem of low EV resale prices remains unresolved. He pointed out that without establishing a more complete system and changing consumer perceptions, the problem cannot be fundamentally solved, and Japan's EV market may struggle to truly become widespread. (Editor: Tang Sheng-yang) 1150507
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(Central News Agency reporter Dai Ya-chen, Tokyo 7th) Japan officially implemented the new 2026 CEV (Clean Energy Vehicle) subsidy system on April 1. After significant adjustments to the electric vehicle (EV) subsidy evaluation standards, China's BYD saw its subsidy drastically cut to 150,000 Japanese Yen, while US-based Tesla maintained a high level of 1.27 million Japanese Yen, sparking discussion in Japan about the 'subsidy gap'.
According to a report by Japan's WEEKLY PLAYBOY NEWS, the new system has a total budget of approximately 110 billion Japanese Yen. Ordinary passenger EVs can receive a maximum subsidy of 1.3 million Japanese Yen (approximately 260,000 New Taiwan Dollars), and light EVs a maximum of 580,000 Japanese Yen. However, the actual subsidy amount will vary based on the comprehensive evaluation of each car manufacturer.
Under the new system, most Japanese car manufacturers such as Toyota, Nissan, and Subaru maintained subsidy levels between 1.1 million and 1.3 million Japanese Yen; BYD, however, saw its subsidy drastically reduced from the original 350,000-450,000 Japanese Yen to a flat 150,000 Japanese Yen.
In contrast, Tesla, also a foreign brand, received similar subsidies to Japanese car manufacturers, drawing attention.
Automotive journalist Kenji Momota pointed out that CEV subsidies do not only consider vehicle performance but are evaluated based on the car manufacturer's overall commitment. The total score is 200 points, covering 6 major categories, including charging infrastructure, stability of battery and critical mineral supply, cybersecurity measures, and maintenance systems.
He stated, "Each car manufacturer will formulate strategies to achieve a high score. Although some companies are dissatisfied with the results, feeling they did not score as expected, they ultimately have no choice but to accept the judgment."
There is particular concern whether BYD has been subjected to 'discriminatory treatment'. However, a former editor-in-chief of an automotive professional magazine believes that the key difference lies in the level of investment in Japan's market infrastructure.
He pointed out that BYD's strength lies in its overwhelming price competitiveness. However, in terms of charging, it mainly relies on existing infrastructure, which does not align with the CEV subsidy's emphasis on 'corporate contribution to charging infrastructure'.
In contrast, Tesla has already built over 140 locations with approximately 700 'Superchargers' in Japan, thus receiving a higher evaluation score.
In other words, Tesla was highly evaluated as an 'infrastructure company' in the Japanese market. BYD was not treated discriminatorily, but the difference arose from varying 'contributions' to the Japanese market to date.
Currently, the scale of Japan's EV market is still limited. In 2025, new car sales in Japan are approximately 4.56 million units, of which EVs account for only about 60,000 units; in contrast, 'national cars' (kei cars) sold 1.66 million units, accounting for about 40%, showing a significant market size gap.
There are also voices of doubt in Japanese society regarding the government's continued strong subsidies for EVs. Manga artist Odawara Doragon, who once drove around Japan, said that although his first test drive in February this year felt quite comfortable, he would "probably still not want to buy one" if charging stations do not significantly increase.
He also questioned, "Why are only EVs given such preferential treatment?" believing that the government could re-examine or even abolish the subsidy system.
Japan is facing rising prices and mortgage interest rates, and most people are struggling just to maintain their daily lives, let alone the fact that EV subsidies are funded by taxes. Many believe that EV subsidies are actually more like a "privilege exclusively for high-income groups" who can afford expensive EVs.
On the other hand, the Japanese government's core goal in promoting EVs is still the 2050 carbon neutrality policy. However, with Europe and the US reviewing their EV policies, and rising energy security concerns due to the Russia-Ukraine war and escalating Middle East tensions, voices in Japan are also beginning to call for a re-examination of the EV subsidy system.
In the US, the Trump administration has successively withdrawn EV incentive policies from the Biden era; China, after canceling EV purchase subsidies, has shifted to price wars and low-interest loan competition, with car manufacturers like BYD continuously lowering prices to seize market share.
Japanese automotive industry insiders analyze that the Japanese government's 110 billion Japanese Yen subsidy aims not only to promote EV products themselves but also to view EVs as part of industrial infrastructure and reduce geopolitical risks dependence on rare metals and battery supply chains.
However, Kenji Momota believes that subsidies are unlikely to truly become a 'trigger point' for stimulating the market. This is because both consumers and dealers have already taken subsidies for granted, and "the truly frightening thing is that once subsidies are canceled, sales may instantly cool down."
In addition, the problem of low EV resale prices remains unresolved. He pointed out that without establishing a more complete system and changing consumer perceptions, the problem cannot be fundamentally solved, and Japan's EV market may struggle to truly become widespread. (Editor: Tang Sheng-yang) 1150507
Choose to stand with facts; every sponsorship you provide is a force to protect press freedom.
Download the Central News Agency 'First-hand News' APP to stay updated with the latest news.
The text, images, and videos on this website may not be reproduced, publicly broadcast, or publicly transmitted and used without authorization.