The Yomiuri Shimbun
The Japanese government is planning to raise the subsidy cap for electric vehicle purchases by 400,000 yen, for a maximum of 1.3 million yen, as part of its plan to revise subsidies for eco-friendly cars from January.
On the other hand, the maximum subsidy for fuel-cell vehicles (FCVs) will be lowered by 1.05 million yen to 1.5 million yen. As a result, both types of car will have maximum subsidies that are about 20% of their average price.
The plan is aimed at equalizing subsidy rates for eco-friendly cars, which reflects the tariff agreement reached with the U.S. government.
The new subsidies will apply to cars registered from Jan. 1, 2026. They will be applied to FCVs from April 1, given the breadth of the reduction.
Under the new system, plug-in hybrids will also see their maximum subsidy raised by 250,000 yen, to 850,000 yen. The upper limit for electric kei cars will stay at 580,000 yen.
Subsidies will be decided based on such factors as the vehicle price and its environmental performance. Models that receive high remarks will see changes in January to March. For example, the subsidy cap for a bZ4X EV from Toyota Motor Corp. or an EV Lexus is now set at 900,000 yen, but this will be raised to 1.3 million yen during this period. Subsidies for other models will be revised from April, with the evaluation criteria to be decided later.
In March, the Office of the U.S. Trade Representative issued a report claiming that Japan's subsidies for purchases of eco-friendly cars serve as a non-tariff trade barrier. It criticized the fact that subsidies were lower for EVs -- for which companies like Tesla Inc. have an edge -- while subsidies were high for FCVs, which Japanese carmakers excel at making.
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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.
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December 17, 2025 02:49 ET (07:49 GMT)
Copyright (c) 2025 The Yomiuri Shimbun
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