Japan a Minor EV Player Despite Record Sales in 2023

Japanese automakers sold record numbers of electrified vehicles in 2023 but lost ground to competitors in China, the U.S. and much of Europe.

According to Swedish market research firm EV-Volumes, Japanese companies sold 493,535 EVs during the year, including 273,224 battery-electric vehicles and 220,311 plug-in hybrid-electric vehicles. Gasoline-electric hybrids and fuel-cell vehicles were not counted.

The automakers accounted for just 2.7% of global BEV demand and 3.5% of combined BEV and PHEV sales.

In a record global BEV market of 10,002,636 sales, the leaders were Tesla, with 1,808,652, and BYD, with 1,571,247. Including PHEVs, the market grew to 14,199,730, with BYD accounting for one-third of the PHEV total.

Nissan and Toyota (including Lexus) were Japan’s leading BEV sellers with 117,785 and 104,016 units, respectively. Toyota/Lexus sales grew 331% from 24,100 in 2022, while Nissan sales rose 29%, owing largely to increased demand for the Sakura kei car (pictured, below) produced jointly with Mitsubishi.

Sakura sales grew to 37,140 and accounted for nearly one-third of Nissan’s global total. It was the top-selling model.

Japanese BEVs not only lag the domestic industry but also major global markets, notably China, Europe and the U.S. EV-Volumes reports that 2023 BEV sales in Japan totaled 92,105, compared with 5,705,699 in China, 2,153,266 in Europe and 1,177,442 in the U.S.

“I think the Japanese strategy is not to accelerate an EV shift blindly, and that’s a smart approach for the time being,” says industry analyst Takaki Nakanishi, a partner in the Nakanishi Research Institute.

“My understanding is that Japanese companies are benchmarking General Motors. They really need to reach at least the same (sales) level as General Motors, because they feel the U.S. government will support GM if it runs into problems (like it did during the 2008 financial crisis). It is not the same for Ford, and Chrysler is effectively a European company.”

Meanwhile, Toyota is on track to becoming the Japanese leader in BEV sales, surpassing Nissan, although questions remain about the automaker’s commitment to the segment.

Toyota announced plans to produce 3.5 million all-electric vehicles in 2030, some 30 models in total, with ranges of up to 625 miles (1,000 km). The total includes both Toyota and Lexus models.

The automaker nevertheless believes BEV sales will peak at 30% of the global market, and thus will continue to expand its hybrid business. Toyota’s hybrid sales grew to 3.4 million units last year, up more than 30% from 2022 levels. Hybrids accounted for one-third of Toyota’s global sales in 2023.

In the BEV segment, Toyota’s current main model is the BZ4X. For the China market, the automaker has entered into a joint venture with BYD.

Toyota is looking to expand its battery business with Panasonic, the main supplier of PHEV batteries to the automaker. The two are currently collaborating in a $13.9 billion battery plant in Liberty, NC, to support U.S. production. 

Nissan, Japan’s current BEV leader, announced plans to introduce 27 new electrified models by 2030, including 19 new BEVs, while No.3 Honda will launch the Prologue BEV in March. General Motors is building the Prologue on a GM platform in Mexico, but Honda last autumn called off plans to extend its BEV collaboration with GM. The Japanese automaker nevertheless has set a 100% BEV sales target by 2040.

Honda and LG Energy Solutions are jointly building a $4.4 billion battery plant in Fayette County, OH.

Nissan hit a roadblock Jan. 29 with Renault’s decision to cancel the IPO offering of Ampere, the French automaker’s EV division. Nissan had committed €600 million ($647 million) to the venture last July. Mitsubishi Motors, the third alliance partner, followed with a €200 million ($216 million) investment in October.

Those investments are now on hold, according to media reports.

Nevertheless, Nakanishi believes that Renault needs Nissan. “More than for volume,” he says, “Renault needs Nissan’s engineering capability. It is my belief that Nissan is stronger in software and battery EV technology.”