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Tesla is a Hit Everywhere But Japan, and Here’s Why

Tesla is the dominant electric car brand in most global markets, but not Japan. Despite the kind of density that would be friendly to electric vehicles and a generally eco-conscious population, Teslas have never caught on in the island nation.

The automaker sold fewer than 2,000 cars in Japan last year, a tiny slice of the nearly half-million it delivered globally. Overall, automakers sold around 3.4 million cars in Japan last year, even as figures were down considerably due to the coronavirus pandemic.

To boost sales there, Tesla has sliced asking prices on its Model 3 sedan by around 20 percent. The cheapest Model 3 is now 4.29 million yen (about $40,600), down from 5.11 million yen.

Those prices are higher than in the U.S. market, though Tesla pays import duties to sell its cars in Japan. Tesla has also begun shipping cars to Japan from its new assembly plant in China, and the relative proximity of that facility compared to its factory in California reduces the cost of transport considerably.

Electric car competition

Tesla faces new, homegrown competition in Japan from the upcoming Nissan Ariya. The shapely SUV uses similar running gear to the Nissan Leaf, and its price point is likely to undercut Tesla.

Additionally, Japan is not a big electric car market. Fewer than 1 percent of new-vehicle registrations in 2019 were for electrified cars including plug-in hybrids, about half of the U.S. and well under the roughly 12.3 percent in the European Union.

Tesla has also trimmed prices in the U.S. on its Model 3 and its Model Y SUV by $1,000 and $2,000, respectively. The Model 3 now starts at $36,990, while the Model Y costs $3,000 more.

See Tesla models for sale near you.


Andrew Ganz
Andrew Ganz
Andrew Ganz is an author specializing in helping in-market consumers get the most bang for their buck -- and the best car, while they're at it. When not virtually shopping for new and used cars, Andrew can probably be found under the hood of a vintage classic that's rapidly losing fluids.

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  1. The byline never comes to fruition. There’s very little explanation in this article of why Tesla doesn’t sell well in Japan. For instance, saying that they will be sourced from the China factory instead of the US factory to lower costs doesn’t deliver the possibility that the Japanese value “made in Japan or USA” carries more weight than a lower prices to the demographic considering Tesla, much in the same way Germans prefer made in Germany. Not all countries have the self-consuming desire to get things absolutely as cheap as possible that seems to pervade the US. It’s also not even touched upon that most Tesla vehicles are huge and especially WIDE, and this doesn’t function well in the urban areas of Japan. And the sticker price has little to do with the ultimate cost of ownership, which includes registration taxes which are applied much differently in most other countries than the US.

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