Automakers are increasingly plugging into electric versions of minivehicles in one of the world's largest car markets, as sub-660cc minivehicles are widely driven in Japan as a convenient means of daily transportation. 

Key companies in the industry, both in and outside Japan, are expected to put electrified minivehicles on sale in the next fiscal year and beyond.

Insiders hope the recent trend may serve as a steppingstone toward broader EV adoption among consumers, while concerns are growing at the same time that heightened rivalry could lead to an overheated price war.

At the Japan Mobility Show 2025 that ended on Nov. 9, the major Chinese auto manufacturer BYD Co. unveiled the prototype of its Racco electric minicar, which is scheduled to hit the market next summer.

It is extremely rare for a non-Japanese enterprise to be committed to developing a minivehicle, because the 660cc standard is exclusive to Japan. Delivering the finished minicar to other markets is thus unrealistic, reportedly rendering profit margins thinner.

The revealed prototype features sliding doors, unlike Japanese makers’ compact EVs. Its tall height makes the interior spacious.

The Chinese EV came in two versions with longer and shorter driving ranges, though their maximum operational distances were not specified. The prices have yet to be disclosed.

“The model is a one-of-a-kind product that only BYD can offer,” said Atsuki Tofukuji, president of BYD Auto Japan Inc. “We now have a real chance.”

Suzuki Motor Corp. similarly presented the prototype of its first mini EV, as the domestic automaker is looking to release it by the end of fiscal 2026.

The electric minivehicle can travel upward of 270 kilometers on a single charge. Its price and other detailed specifications remain undisclosed.

A Suzuki development official vowed that the EV model’s “usability will not be significantly different from that of its gasoline-powered counterpart.”

Suzuki was the top seller of minivehicles in Japan as of fiscal 2024. However, the automaker acknowledges that it lags behind its rivals in the EV field, since it only recently rolled out an electric sport utility vehicle (SUV) in Europe this year.

President Toshihiro Suzuki has stressed that the company will “continue to pursue our ideal form of automobile that can be woven closely into daily life” even in the area of electrified minicars.

CHANCE FOR DAILY USE

Japanese corporations are increasingly dedicated to smaller EVs. Nissan Motor Co. rolled out its Sakura mini EV in 2022. Honda Motor Co. put its N-One e: on the market in September this year as well.

These electric minivehicles are highly expected to catalyze widespread EV adoption among motorists in Japan, whereas the country is considered, compared with other nations, as a late starter in promoting electric cars.

Those compact models are designed for daily shopping and commuting tasks. EV-specific issues, such as the short driving range and limited recharging infrastructure, may be therefore less of a barrier to purchasing for minivehicle fans.

WORRIES ABOUT PRICE WAR

The market price is a key indicator of the future of mini EVs.

Electric minivehicles introduced by Japanese companies are available for more than 2 million yen ($12,800). Their price range is higher than that of gasoline-powered models, though the eco-friendly vehicles are eligible for a dedicated government subsidy.

In addition to the core component known as the onboard battery being expensive, sales volumes have not yet reached a level where mass-production benefits can be fully realized.

The entry of BYD could further intensify the price war for mini-EVs in Japan in the future, given that the Chinese maker has been leading its home market despite fierce pricing rivalry.

Japanese automakers are taking a cautious stance on whether to seek lower sticker prices while keeping in mind the powerful contestant from China. Suzuki, in fact, intends to stay away from price-based competition.

An executive of another major Japanese automaker emphasized, “When looking at EVs from a profit perspective, the business viability is tough at present.”

(This article was written by Jumpei Miura and Akihiro Nishiyama.)