Chinese electric vehicle (EV) makers are venturing into Japan's compact-car market, challenging long-established domestic players with competitively priced, longer-range models that could accelerate the country's slow shift toward electrification.

At the recently concluded 2025 Japan Mobility Show, Chinese EV makers unveiled more than a dozen new energy vehicle (NEV) models, drawing significant industry and media attention.

Leading carmaker BYD showcased 13 models at the event, including the compact all-electric "Sealion Mini EV," the plug-in hybrid Sealion 06DM-i, and the all-electric SUV ATTO 3.

The company also unveiled two commercial vehicles, the T35 small electric truck and the K8 large electric bus, both making their global debut. The Sealion Mini, designed specifically for Japan's lightweight car segment, has caused a stir in the industry by directly challenging the market long dominated by domestic manufacturers.

According to Tang Jin, a senior researcher at Japan's Mizuho Bank, BYD's new model targets Japan's massive compact car segment (especially kei cars) of about 1.7 million units annually, the mainstream and a core pillar of the domestic passenger car market.

"Foreign automakers will be facing formidable local rivals," Tang said, predicting that the car scheduled for release in 2026 will offer a driving range exceeding 300 km, roughly double that of Nissan's Sakura, while being priced 20 to 30 percent lower, making it highly attractive to Japanese consumers.

Experts say that as Japanese consumers remain cautious about adopting fully electric vehicles, the entry of Chinese manufacturers could accelerate the country's transition toward electrification.

The influence of China's NEV expansion was evident among Japanese exhibitors. Honda introduced six new electric models, including the N-ONE e:, aimed squarely at the compact car market; Nissan showcased a solar panel-equipped version of the Sakura to boost range; and Suzuki presented its Vision e-Sky, a compact EV slated for launch in fiscal 2026.

Suzuki President Toshihiro Suzuki told local media that BYD's entry into the compact EV segment would act as "a catalyst" for the popularization of small electric cars in Japan, adding that his company would continue to advance its own EV development and rollout plans.

Since entering Japan's passenger car market in early 2023, BYD has drawn considerable attention from the Japanese industry. Tang noted that foreign EV makers face two key hurdles in Japan: strong consumer loyalty to domestic brands and the enduring dominance of gasoline vehicles.

In 2024, battery-electric and plug-in hybrid vehicles accounted for only 2.6 percent of new car sales in Japan, with the ratio expected to rise modestly to 3.5-3.6 percent in 2025, leaving ample room for growth.

BYD Japan told Xinhua that the company is tailoring its market approach to local consumer preferences and business practices. Responding to strong demand for compact and hybrid vehicles, BYD plans to introduce more plug-in hybrid and lightweight EV models to Japan.

The automaker has already opened over 60 dealerships across the country as of October and aims to exceed 80 by year-end. It is also expanding fast-charging infrastructure compatible with existing Japanese networks to improve customer convenience.

Meanwhile, Geely's premium EV brand Zeekr is reportedly preparing to enter the Japanese market through local distribution partners.

Tang emphasized that China and Japan have great potential for collaboration in materials, components, and advanced manufacturing, areas where Japanese suppliers possess decades of research experience.

"As Chinese electric vehicles go global, technological and capital cooperation between the two countries can create mutual benefits and a genuine win-win scenario," he noted.