Yomiuri Shimbun Staff Writer
With BYD Co., China's largest electric vehicle (EV) manufacturer, having launched its Racco kei mini EV in Japan, whether it can break the stronghold of Japanese manufacturers is garnering close attention.
The Racco is a model developed exclusively for the Japanese kei car market, a vehicle category unique to Japan. Prices start at 2.14 million yen, including tax, and with a government subsidy it can effectively be purchased for starting at 1.99 million yen.
Targeting 10,000 units by year-end
At a press event on Tuesday in Tokyo to announce the release of the Racco, Liu Xueliang, president of BYD's Japan unit, said: "Kei cars are part of Japanese culture. Using our technology, we want to deliver unprecedented convenience and enjoyment to everyone." BYD has set a target of 10,000 orders by the end of the year.
A government subsidy of 150,000 yen will be applied when purchasing a Racco. The model is priced competitively, holding its own against kei EVs from Japanese manufacturers such as Nissan Motor Co.'s Sakura and Honda Motor Co.'s N-One e:, which qualify for a 580,000 yen subsidy.
With a total height of 1.8 meters, the Racco belongs to the "super-height wagon" category, which is popular in the kei car market. In addition to its price, the model offers a wealth of features. It is equipped with sliding doors, which make getting in and out easier and are popular with families, and has a maximum range of 320 kilometers on a full charge, surpassing that of Japanese kei EVs.
Kei cars must strike a balance between price and performance within particular specifications, and it is said difficult for foreign manufacturers to enter the market.
In preparation for the launch of the Racco, BYD hired Hirohide Tagawa as an employee. Tagawa was involved in Nissan's kei EV projects and through hiring him, BYD aims to compensate its lack of experience by using the expertise of the Japanese engineer. The development period took two and a half years, shorter than Japanese cars, and was achieved by sourcing key components, such as batteries, entirely within its own group.
Japanese makers wary
BYD's decision to challenge the kei car market, a move virtually unprecedented among foreign manufacturers, is aimed at boosting its performance in the Japanese market.
In 2025, BYD sold 2.25 million EVs worldwide, becoming the global leader in EV sales. In Japan, the company began selling passenger cars in 2023 and introduced five models, including the compact Dolphin. But the total sales in 2025 stood at 3,742 units, less than 10% of total EV sales in Japan. In terms of the number of dealerships, it stood at 77 locations as of Tuesday, failing to meet the company's initial target of at least 100 by the end of 2025.
Yoichiro Okuyama, a senior researcher at Hamagin Research Institute Ltd. who is well-versed in the automotive industry, pointed out, "Japanese customers still have the impression that Chinese-made products are 'cheap but poor quality.'" However, Japanese automakers are highly wary of BYD's Racco. An executive at one automaker said: "To be honest, we're fearful of BYD's competitiveness. It'll be a real headache if (the model) is made into a series."
Japanese automakers are also focusing on kei EVs for short-distance use, such as shopping and commuting. Nissan launched the Sakura in 2022, and Honda began selling kei EVs last year. But their lineups do not include super-height wagons that are popular in the market.
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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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