Japan’s Domestic EV Sales Decline Amid Import Reductions

JAIA

In September, Japan’s domestic electric vehicle (EV) market continued its downward trend, marking the eleventh consecutive month of decline. Sales reached 6,429 units, reflecting a 28.7% decrease from the same period last year, according to preliminary data from key industry groups, including the Automobile Dealers Association and the Japan Automobile Importers Association (JAIA). However, on a month-to-month basis, sales saw a significant rebound of 45.3%.

Decline Driven by Reduced Foreign Imports

One of the key factors behind this persistent drop in EV sales is the reduced import of foreign EV models. Foreign brand EV sales fell for the second month in a row, reaching 2,739 units—a 13.4% drop compared to September of last year when imports exceeded 3,150 units. Despite this decline, imported EVs still made up 43% of Japan’s total EV sales in September, underlining their popularity among consumers, who favor the variety of models offered by foreign manufacturers.

On the domestic front, sales from local manufacturers have been sluggish. Notably, Nissan’s Sakura model, a leader in Japan’s EV market, saw a sharp decline of 34.6%, selling only 2,485 units in September. Despite this, the Sakura model still accounted for 38.7% of Japan’s total EV sales, underscoring its importance to the domestic market.

Japan’s Domestic EV Sales Continue Decline in July, Driven by Sluggish Light Vehicle Demand

Japan's domestic electric vehicle (EV) market continued its downward trend in July, with sales falling by 20 percent compared to the same month last year. This marks the ninth consecutive month of year-over-year declines in the Japanese EV market, a reflection of waning consumer interest in light passenger EVs.

According to preliminary data from the Automobile Dealers Association, the Japan Light Motor Vehicle and Motorcycle Association, and the Japan Automobile Importers Association (JAIA), total EV sales in July reached 5,072 units. Although this represents a slight 1.2 percent increase from June, the overall market share of EVs in Japan's passenger car sector dropped to 1.5 percent, down 0.5 percentage points from the previous year.

The most significant contributor to this decline was the sharp fall in light passenger EV sales, which plummeted by 35 percent to 2,362 units. The downturn was primarily driven by a 32 percent decrease in sales of Nissan's Sakura model, a vehicle that typically accounts for over 90 percent of light passenger EV sales in Japan. Light cars in Japan are defined by specific size and engine capacity criteria, making them a popular choice among domestic consumers.

On the other hand, ordinary passenger EV sales saw a modest recovery, rising by 1.2 percent year-on-year to 2,710 units. This marks the first year-on-year growth in this segment since November 2023, largely due to the continued popularity of imported EVs in the Japanese market. Foreign EV sales have been on the rise for five consecutive months, with July's figures showing a 28 percent increase to 1,689 units.

A representative from JAIA noted that, unlike the global EV market—where demand among higher-income consumers has slowed, particularly for luxury models—Japan's market for imported EVs remains robust and is expected to continue its upward trajectory.

Japan's Lithium Imports Drop Amid Slow EV Market in 2024

Lithium Mining

Decline in Lithium Carbonate Imports and Slight Increase in Lithium Oxide and Hydroxide

Japan has experienced a significant reduction in lithium carbonate imports in 2024, signaling a shift in the country’s energy and automotive sectors. While lithium oxide and hydroxide imports have seen a modest rise, the broader context of a sluggish global electric vehicle (EV) market has heavily influenced these changes.

Sharp Decline in Lithium Carbonate Imports

In 2024, Japan’s imports of lithium carbonate plunged by 40%, with a total of approximately 11,520 tons imported, according to data from Japan’s finance ministry. This represents a stark contrast to previous years when imports showed more consistent growth. Imports from Chile, the top supplier, saw a dramatic drop of 55%, with imports falling to about 5,143 tons. Argentina also experienced a decline in exports to Japan, falling by 5.6%, while Chinese imports dropped by 34%, totaling around 1,908 tons.

Increase in Lithium Oxide and Hydroxide Imports

On the other hand, Japan’s imports of lithium oxide and hydroxide showed a slight increase of 6% in 2024, reaching approximately 37,640 tons. A key contributor to this increase was a rise in imports from China, which edged up by 4.6%, amounting to about 32,354 tons. Interestingly, imports from Chile saw a significant uptick, rising to 1,872 tons, a notable increase from the 138 tons recorded in 2023. However, imports from the U.S. dropped by 24%, falling to 3,338 tons.

Declining EV Demand and Impact on the Domestic Market

Japan’s domestic electric vehicle market also faced challenges in 2024, with sales of passenger EVs falling by 33% due to weaker demand for local brand vehicles. According to preliminary data from industry associations, such as the Japan Automobile Importers Association (JAIA) and the Japan Light Motor Vehicle and Motorcycle Association, this drop in sales reflects broader trends in consumer preferences and economic conditions.

To stimulate the domestic EV market and boost the steel industry, Japan’s Ministry of Economy, Trade, and Industry (METI) announced plans to increase subsidies for EV purchases starting from April 2024. This initiative aims to encourage the adoption of electric vehicles and provide relief to Japan’s steel sector.

Japan’s Domestic EV Sales Decline for 12th Consecutive Month in October

Japan’s EV

The electric vehicle (EV) market in Japan continued to face challenges in October, with domestic passenger EV sales falling for the 12th straight month. Data from the Automobile Dealers Association, Japan Light Motor Vehicle and Motorcycle Association, and Japan Automobile Importers Association (JAIA) revealed a significant 35.1% year-on-year drop, totaling just 4,325 units sold. Month-on-month, sales decreased by 32.7%.

Declining Market Share for Domestic Brands

Domestic EVs accounted for only 1.3% of Japan’s total passenger car sales in October, down from 2.0% in the same period last year. A key contributor to this decline was the sharp drop in sales of Nissan’s Sakura, one of the best-selling models among Japanese brands. Sakura sales plummeted by 51.6%, recording just 1,448 units.

Imported EVs Remain Resilient Amid Supply Constraints

While foreign-brand EV sales also declined, the drop was less pronounced at 4% year-on-year, with 1,900 units sold in October. Volkswagen, one of the leading foreign brands, faced supply shortages that contributed to the downturn. However, imported EVs accounted for approximately 44% of Japan’s total EV sales, reflecting sustained demand for international models in the domestic market.

Toyota Revises Global EV Sales Outlook

Amid this downward trend, Toyota, Japan’s largest automaker, revised its global EV sales forecast on November 6. The company now expects to sell 160,000 EV units by the fiscal year ending March 31, 2025—a reduction of 11,000 units from its initial projection in May. This revision reflects broader challenges faced by Japanese automakers in the increasingly competitive EV market.

As Japan grapples with declining EV sales and shifting consumer preferences, the automotive industry faces mounting pressure to adapt and innovate.

Japan's Domestic EV Sales Plummet in 2024

Japan EV

Sales of domestic passenger electric vehicles (EVs) in Japan experienced a sharp decline in 2024, primarily driven by weaker demand for domestic EV brands. Preliminary data from the Automobile Dealers Association, the Japan Light Motor Vehicle and Motorcycle Association, and the Japan Automobile Importers Association (JAIA) show total EV sales of 59,736 units in January-December 2024, a significant 33% drop from 2023.

Decline in Market Share and Domestic Brand Sales

The share of EVs in total passenger vehicle sales also decreased, falling by 0.7 percentage points to 1.5%. The Japanese domestic EV market has been sluggish throughout 2024, with year-on-year sales declines every month. This downturn is largely attributed to lower demand for domestic EV brands, with sales falling by approximately 46% to 35,679 units in 2024.  Sales of Nissan's Sakura, a top-selling domestic EV, dropped by 38% to 22,926 units.

Growth in Foreign EV Sales

In contrast to the declining domestic sales, foreign brand passenger EVs maintained strong demand in 2024. Sales increased by 5.3% year-on-year to around 24,000 units, marking the sixth consecutive year of annual growth. Foreign brand EVs now account for approximately 40% of total passenger EV sales in Japan.