Automotive giant Toyota surprised everyone with its electric vehicle (EV) sales figures in Japan in August. Including its luxury brand, Lexus, it sold only 18 electric vehicles. This figure raises questions for Toyota, which sells approximately 17,000 EVs globally. So, why have EV sales in Japan, Toyota’s home country, fallen so much? Here are the details.

Japan Lags in Electric Vehicles

Overseas markets like Europe, China, and North America accounted for 17,038 of the 17,000 EVs it sold in August. In fact, the company is on track to sell 117,031 battery electric vehicles (BEVs) globally in the first nine months of 2025, surpassing its total sales figure of approximately 140,000 in 2024.

However, the situation in Japan is quite different. Toyota and Lexus sold only 469 EVs combined in the first eight months of this year. This figure is well below the company’s 2,038 units sold in all of 2024.

This isn’t unique to Toyota. Japan is experiencing a significant slowdown in the electric vehicle transition compared to China and other major markets due to a lack of government support and the limited EV options available to consumers. Consumers continue to gravitate towards gas-powered hybrid models over EVs.

Even Chinese automotive giant BYD, known for its rapid global growth, hasn’t been able to gain traction in the Japanese market. Having launched its first vehicle in January 2023, BYD has sold only 5,300 vehicles by June of this year.

According to a Bloomberg report, BYD has begun offering discounts of up to ¥1 million (approximately $6,700) on its vehicles to stimulate sales. Combined with government subsidies, these discounts reduce vehicle prices by up to 50%. This demonstrates how sensitive Japanese consumers are to EV prices.

Contrary to the Japanese market’s wariness of EVs, Toyota’s hybrid sales are on the rise. The company has sold more than 603,600 hybrid models in Japan this year, marking a nearly 10% increase in this segment. Globally, Toyota’s hybrid sales increased by 14%, reaching more than 2.3 million models as of the end of August.

In conclusion, while Toyota is rapidly advancing in global EV markets, in its home country of Japan, factors such as consumer loyalty to hybrid vehicles, limited infrastructure, and a lack of government incentives are key factors contributing to the slump in EV sales.

So, what are your thoughts on this? Share them in the comments.