According to recent data, Japan's new car sales in July grew 7% year-over-year to 417,200 units, marking the fourth consecutive month of exceeding last year's figures. Among the standout performers was BYD's first pure electric light vehicle (k-car) specifically designed for the Japanese market, the Racco. While actual registered sales in July reached 125 units, BYD disclosed that order intake has already surpassed 700 vehicles, with most registrations attributed to dealer test-drive vehicles.
The Racco officially launched in Japan on July 28, representing BYD's first k-car model developed specifically for this market and the first time a Chinese brand has entered Japan's national light vehicle segment. The new car is available in three trim levels, with pre-tax prices ranging from 2.145 million to 2.497 million yen (approximately 88,800 to 103,300 yuan). The entry-level Racco 200 is equipped with a 22.4 kWh battery, offering a WLTC range of 210 kilometers.
The high-end Racco 300 features a 35.84 kWh battery, providing a range of 320 kilometers, making it Japan's first pure electric light vehicle to surpass 300 kilometers of range. It directly competes with the Nissan Sakura (180 km range) and Honda N-BOX series. The drive motor delivers a peak power of 47 kW and peak torque of 160 Nm, with a 2+2 seating layout.
However, the Racco faces not only product competition but also unequal subsidy barriers. On April 1, 2026, Japan's Ministry of Economy, Trade and Industry revised the CEV (Clean Energy Vehicle) subsidy rules, introducing a "domestic battery supply chain safety score weighting" that ties subsidy amounts closely to battery production locations. The BYD Racco, using its own batteries, is eligible for only 150,000 yen (about 6,200 yuan) in national subsidies. In contrast, the Nissan Sakura, which uses Japan's domestic battery supply chain, can receive 580,000 yen. Honda's upcoming N-ONE e: similarly enjoys high subsidies. With additional local government subsidies, domestic k-car subsidies can total four to five times that of the Racco. This means the Racco's post-subsidy entry price is approximately 1.995 million yen, making it more expensive than the subsidized Nissan Sakura, despite the Racco's overall advantages in hard metrics like range and battery capacity.
Japan's k-car market has long been dominated by domestic models such as the Honda N-BOX and Suzuki Spacia. The Honda N-BOX, which has been the top-selling model for 11 consecutive years, sells over 200,000 units annually. Nevertheless, the 700-unit order volume indicates that the Racco has already carved out a niche.
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