Japan's bestselling electric vehicle isn't a Tesla, but a $13000 tiny car

eK X electric vehicle on display during an off-line ceremony at the Mitsubishi Motors Mizushima plant in Kurashiki, Okayama Prefecture, Japan. Kei is short for keijidosha, meaning light automobile. BloombergShow less

Japanese car makers and customers have earned a reputation for being slow to embrace the shift to electric vehicles, but an unlikely domestic winner offers a hint of how EVs can evolve to suit different markets.

Introduced last year, Nissan Motor’s Sakura – jointly developed with Mitsubishi Motors, which sells it as the eK X – is the best-selling EV in Japan this year, data compiled by Bloomberg shows.

The models, which jointly won Japan’s Car of the Year award in 2022, account for roughly half of all EV sales in the country, with 35,099 units sold so far this year, data by auto industry groups showed.

“We launched a kei EV as it suits Japanese people’s everyday needs and road conditions here,” Keiko Kondo, Nissan’s chief marketing manager for Sakura’s domestic business, said.

The dimensions of the small, boxy EVs put them squarely in a class of cars known as kei – “light” in Japanese – making them ideal for navigating the country’s narrow roads.

With better fuel economy and lower taxes, they’re popular among workers and families living outside major cities, where public transportation is sparse.

With an electric motor providing greater acceleration and speeds surpassing other keis, the Sakura delivers a driving experience that’s more like a regular-sized car. While the battery offers a more limited range of about 180km, it can be fully charged overnight and plugged into a household outlet.

A salesman at a Nissan dealership in Fujisawa, a city outside Tokyo, said many customers buy it as an extra car to run errands around town. Resident of Saitama, Takatoshi Ehara, 59, bought a Sakura to replace the hybrid vehicle his family used as a second car because their children were older, and they no longer needed a big car.

“My wife’s commute is only 6km, so we switched to Sakura,” he said. “I also drive it and we are quite satisfied.”

The Sakura and eK X are leading the way in an otherwise still subdued EV market. Fully electric cars made up just 1.5 per cent of new-car sales in Japan last year.

The kei car’s price of around ¥2 million ($13,300), which includes government subsidies, makes it “an EV accessible to all,” Ms Kondo said. A decline in the number of petrol stations in suburbs and rural is also contributing to the spread of EVs, because they can be easily charged at home.

Among domestic manufacturers, Suzuki Motor, Toyota Motor and its subsidiary Daihatsu are introducing a commercial kei EV aimed at businesses by March, and Honda Motor is scheduled to introduce one in 2024.

Still, not all carmakers are on the kei bandwagon, preferring instead to focus on producing larger EVs that can generate bigger profits. That’s clear based on the models they plan to show at the Japan Mobility Show this week.

It’s also hard to translate success in Japan into overseas sales – the Sakura and eK X aren’t sold globally for various reasons, including their inability to meet collision standards of other countries, or regulations that apply to engine displacement or top speeds. The Sakura and eK X have a top speed of around 130km per hour.

Kei cars can’t drive on US roads, while Mercedes-Benz AG has been in the segment with its Smart cars, first with gasoline-powered engines and now as an electric car with Zhejiang Geely Holding Group.

Nissan will continue to have an edge when it comes to EV sales, according to Ms Kondo, because of its dealership network and experience in selling EVs, especially with the Leaf, the first EV by a major global manufacturer, since 2010. Nissan reached the milestone of selling more than 650,000 units of Leaf worldwide as of July 25.

“Being the pioneer in Japan’s EV industry, we aim to keep Nissan as the No 1 EV seller next year and the year after that,” she said. Nissan plans to launch 19 EV models by 2030, and also begin using solid-state batteries by 2028.

eK X electric vehicle in the inspection area of the production line at the company's Mizushima plant in Kurashiki, Japan. Bloomberg

More broadly, it is still a challenge getting drivers in Japan to shift to EVs.

High price tags, lack of charging infrastructure and availability of more hybrid options in Japan are the main reasons why fully electric cars haven’t been embraced, according to Yoshiaki Kawano, associate director at S&P Global Mobility.

Hybrids accounted for about half of the cars sold in Japan during September, according to data by the Japan Automobile Dealers Association and a kei vehicle industry body named Zenkeijikyo.

“As far as battery EVs are concerned, we may see a big market in China and some European nations,” said Koji Endo, managing director at SBI Securities, adding that US uptake won’t be as much as the previous two. For Japan, “we probably will never see EVs taking 50 per cent of market share at least for the time being.”

Sakura owner, Yoshinori Suwa, 41, said the subsidy and Nissan’s help in installing a charging system at his home in Fukushima brought down Sakura’s cost to as low as a second-hand car.

“Its running cost is cheap,” he said. “More than anything, I’m most happy about being free from the hassle of refuelling petrol and changing the oil.”