BYD, which has leaped to second place in global EV sales, behind only Tesla, will start selling the midsize sport utility vehicle Atto 3, the hatchback compact car Dolphin and the sedan Seal from January, launching them sequentially. They will make BYD the first Asian automaker to offer electric vehicles in three different categories in Japan.
The way of launching new EV models in rapid succession into a highly competitive car segment is unusual for a foreign manufacturer, which tends to carefully assess customer responses one by one.
Despite the presence of globally known automakers such as Toyota Motor, there are still few models of electric vehicles available in Japan, whose shift to EVs has been quite slow.
Electric vehicles accounted for only about 1% of new vehicle sales last year in Japan. BYD Japan president Liu Xueliang recently told Nikkei Asia that “the small lineup and variety of EVs may perhaps be the reason for the low percentage”.
Still, he said, “We believe that there are a growing number of Japanese consumers who potentially want to use EVs. BYD will provide them with the new electric cars, and I think we can bring a lot of vitality to the Japanese auto market as well.”
Regarding BYD’s entry into the Japanese market, Seiji Sugiura, an analyst at the Tokai Tokyo Research Institute, said: “The company wants to compete with mass-produced models, not with superluxury cars or cheap sales. It may be also aiming to enhance its reputation by achieving success in Japan, one of the most competitive markets in the world.”
Entering the Japanese market with electric vehicles is a “natural progression”, Xueliang said, noting that BYD began doing business in Japan as far back as 1999. The Shenzhen-based company began by supplying batteries – its founding business – to Japanese companies, and has since been involved in solar energy products and electric buses.
BYD’s strategy has been to enter the passenger car market in foreign countries after gaining a good reputation through selling electric buses for public transportation.
Since buses, unlike most cars, travel long distances every day, Xueliang says they make it easier to prove the durability of the company’s batteries. “If electric vehicles can serve as public transportation, we believe they can also be popularised as passenger cars.” The strategy will be followed in entering the Japanese market as well.
In the first half of 2022, BYD’s global sales of new energy vehicles, including EVs and plug-in hybrids, more than tripled compared with the same period last year, reaching 640,000. “China is a market in which all automakers compete hard in various types of cars,” Xueliang said. “As we are performing well in that market, we will be able to compete on a global scale.”
Still, Xueliang said, “We sometimes say it’s like there are no competitors in Japan” because EVs have not yet created enough of an industry there. On the other hand, in the coming EV era in Japan, whose government has set a goal of having only electrified new cars sold by 2035, the rivals for BYD’s compacts and sedans could be made not only by Japanese manufacturers but Tesla and other foreign EV makers.
BYD is still considering the prices of the vehicles it will offer in Japan and expects to make an announcement by the end of the year. All eyes will be on the automaker to see if it can make a strong start in Japan.