BYD is about to give Toyota a wake-up call with this cheap EV

BYD’s new electric car may be small, but it’s expected to be a big problem for Toyota and other Japanese auto brands.

BYD’s first EV kei car will give Toyota a wake-up call

It’s no secret by now that BYD is best known for its ultra-affordable EVs. It’s cheapest, the Seagull, can be bought for under $10,000 in China.

At the Japan Mobility Show on Friday, the Chinese EV giant will unveil a new type of vehicle. BYD will debut its first electric kei car, or what it calls a “light EV.”

If you’re not familiar, kei cars are one of the most popular choices in Japan as affordable, ultra-compact vehicles perfect for getting around the city. About a third of passenger vehicles sold in Japan last year were kei cars.

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BYD is preparing to take its first crack at the market, a rare move for a foreign brand. Domestic automakers like Toyota, Honda, and Nissan have historically dominated the Japanese market. Last year, they accounted for over 90% of the 3.7 million new cars sold in the country.

Although it launched its first vehicle in January 2023, BYD has struggled to gain traction in Japan. Since entering the market, the company has only sold about 6,600 electric vehicles. That’s far from what it was expected to sell at this time.

“In terms of our initial expectations, our sales in Japan are missing a zero,” Atsuki Tofukuji, BYD’s head of sales in Japan, told Reuters in an interview.

Although BYD’s electric kei car won’t go on sale until next year, government officials and auto industry leaders are already preparing for a shake-up.

According to Reuters, over half a dozen Japanese government officials and auto industry insiders said the government is still paying close attention to China’s EV leader.

Three of them even admitted BYD represented “a much-needed wake-up call for Japanese automakers that have been focused primarily on hybrid technology,” the report said, like Toyota.

Meanwhile, BYD sees an opportunity as more buyers in Japan shift from gas-powered cars to EVs. The automaker aims to establish its presence in all 47 prefectures in Japan by the end of 2026, Tofukuji said during the interview.

After updating its EV subsidy program last year, Japan now takes into account factors such as the number of charging stations an automaker builds.

The changes make BYD vehicles eligible for a 350,000 yen ($2,300) subsidy, down from up to 850,000 yen they previously qualified for.

Although BYD has yet to reveal prices, it’s expected to use in-house Blade LFP batteries to cut costs. It’s expected to start at around 2.5 million yen ($18,000), putting it on par with the Nissan Sakura, Japan’s best-selling EV last year.

Honda also launched its first electric kei car, the N-ONE, last month. Prices for the Honda N-ONE EV start at 2.7 million yen ($18,300).

BYD will unveil the new EV at the Japan Mobility Show, which opens on Friday, October 30. Press days start on Thursday, October 29. Check back soon for the latest updates.