Japan’s imported vehicle market recorded its first annual growth in seven years, with sales rising 3% year-on-year to 238,081 units in fiscal 2025, according to data released by the Japan Automobile Importers Association. The growth was primarily driven by battery electric vehicles. Imported EV sales rose 34% to 33,299 units, marking the seventh consecutive year of expansion and accounting for 14% of total import sales, up 3 percentage points from the previous year. As of June 2025, the number of imported EV models in Japan expanded from 20 models across 10 brands in 2020 to 173 models across 22 brands, representing nearly a ninefold increase over four years. Japan’s newly registered imported vehicles by brand for fiscal years 2024 and 2025 Government subsidies also provided support. Starting January 1, 2026, Japan raised the maximum EV subsidy from 900,000 yen ($5,670) to 1.3 million yen ($8,190), further stimulating consumer demand. Among individual brands, BYD posted notable growth. Its sales in Japan doubled year-on-year to 4,536 units in fiscal 2025, lifting its market share to 1.26%. The company’s SUV model, Sealion 7, launched in April last year with a starting price of 4.95 million yen ($31,170). BYD Sealion 7 It accounted for nearly 60% of monthly sales shortly after launch, becoming a key driver of overall growth. In October, BYD introduced the Racco, a kei-class electric vehicle tailored specifically for the Japanese market, at the Tokyo Motor Show, entering direct competition with domestic brands such as Toyota and Suzuki. It also launched the Sealion 06 DM-i plug-in hybrid during the same period. BYD Racco By contrast, traditional premium brands maintained leading positions but showed signs of slowing growth. Mercedes-Benz remained the top importer with 49,654 units sold in 2025, down 6% year-on-year, while BMW ranked second with 34,044 units, down 7%. Tesla did not disclose specific figures, but sales categorized under “others” totaled 13,717 units, the majority of which are estimated to be Tesla vehicles.