Challenges for Tesla in Japan as Elon Musk Aims to Boost Sales

Tesla Japan
Tesla Japan

In 2010, Elon Musk foresaw Japan becoming Tesla’s top market outside the US. However, over a decade later, Tesla faces difficulties in Japan, and Musk acknowledges that the company’s market share there is quite low.

While Tesla competes with major Japanese carmakers like Toyota, Honda, Suzuki, and Nissan, the broader issue is that all electric vehicle (EV) manufacturers struggle to gain traction in Japan. Even though EV sales have risen globally, Japan lags behind due to a preference for hybrids. In 2023, hybrid car sales surpassed the combined share of gasoline and diesel cars.

The popularity of hybrids in Japan is attributed to their affordability and reliability, not relying on a robust charging infrastructure. Bloomberg Intelligence senior auto analyst Tatsuo Yoshida explained that strong sales of hybrids are due to their practicality in the absence of widespread charging stations.

Japanese leaders, including Toyota’s chairman Akio Toyoda, express skepticism about fully embracing EVs. Toyoda has criticized the media for exaggerating the benefits of EVs, calling them a “mirage.” This hesitation not only affects EV adoption but also hampers the development of charging infrastructure in Japan, with only about 30,000 EV charging connectors nationwide, keeping prices higher.

Despite these challenges, Japanese carmakers are planning to enhance their EV efforts. Toyota aims to introduce 30 battery electric vehicle models by 2030, while Honda envisions EVs and hydrogen fuel cell cars constituting 100% of sales by 2040.

Tesla and Toyota did not provide immediate comments on their plans for the Japanese market. As Elon Musk seeks to increase Tesla’s sales in Japan, overcoming these challenges may require navigating the country’s preference for hybrids and addressing concerns about EVs.