Toyota Rolls Out First Battery Electric Car in Cautious Debut in Japan

Toyota rolls out its first mass-produced battery electric car in Japan on 12th May 2022 for lease only, a strategy the automaker says will help ease driver concerns about battery life and resale value but has raised analysts’ eyebrows.

Related: Toyota Shares Sink After Fraudulent Emissions Data Scandal

According to industry data, Hybrid-electric models (HEVs) remain far more popular in Toyota’s home market than electric vehicles (EVs), which accounted for just 1% of the passenger cars sold in Japan last year. Still, the market is growing fast and foreign automakers including Tesla are making visible inroads on the streets of cities such as Tokyo.

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Bundling insurance, repair costs and a battery warranty into the deal, Toyota will lease the bZ4X sport utility vehicles (SUV) at the equivalent of US$39,000 for the first 4 years. Cancelling in the first 48 months will mean an additional fee. However, while EV acceptance has been slow in Japan, that will change eventually, and Toyota could risk losing market share by focusing on a model of leasing rather than purchasing, said CLSA analyst Christopher Richter.

“Anything you are doing that’s making it harder to buy is maybe not a good thing. It’s a strategy I am not that fond of. It does signal that Toyota is taking the home market a little bit for granted.”

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Toyota said in December it would commit 8 trillion yen (US$62 billion) to electrify its cars by 2030. The company aims to lease 5,000 of the SUVs in the current financial year – around the same amount of EVs that analysts estimate Tesla sold in Japan last year.

Related: Toyota bZ4X BEV Launched in US

Toyota plans to start selling the bZ4X (which was launched in the U.S in April) in other markets later this year, and pre-orders have already started in some European countries. However Toyota has not yet decided when it will start selling the cars in Japan, a spokesperson said.


EVs became popular in Europe through lease programs offered by employers and Toyota may be trying a similar tack to popularize electric cars, said Seiji Sugiura, a senior analyst at Tokai Tokyo Research Institute.

Related: Toyota Unveils 16 EVs to Accelerate Carbon Neutrality

First-time customers are concerned about battery life and the potential fall in the trade-in value over time, said Shinya Kotera, president of KINTO, the Toyota unit offering the leases. He said “It’s our role to dispel anxiety” toward EVs.

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Imports of battery EVs jumped almost three times to a record 8,610 vehicles in 2021, according to industry data. Analysts estimate roughly 60% of those were Teslas. Still, Japanese automakers remain cautious about switching into the all-electric lane.

Related: Toyota’s Strategy to Pursue Hydrogen Combustion ‘Doesn’t Seem Feasible’- Honda CEO

Toyota pioneered the hybrid more than two decades ago and retains big ambitions for both hybrids and hydrogen-powered vehicles, even as it is investing more to boost its battery EV line-up. Rival Nissan pioneered mass-market EVs with the Leaf in 2010 but will launch only its second battery EV model in May 2022, the Ariya SUV which will be sold for the equivalent of US$41,500, not including a government subsidy.

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