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.