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China’s BYD launched an electric mini-car in Japan on Tuesday, hoping the Racco model will revive sales in a market where it has struggled to gain traction since entering the passenger-car segment in 2023.
The Shenzhen-based automaker said buyers could get the entry-level Racco for less than 2 million yen ($12,213) after taxes and government subsidies, a threshold some analysts have said will be key for attracting Japanese drivers.
The model’s suggested retail price starts at 1.95 million yen before taxes and subsidies, undercutting Nissan’s Sakura, Japan’s best-selling electric mini-car. But because the Racco is eligible for a smaller government incentive, the Sakura remains cheaper for buyers after subsidies are applied.
“Looking at the price, you can see how serious BYD is about taking on” the Japanese market, said Tang Jin, a senior researcher at Mizuho Bank.
BYD is targeting 10,000 orders for the Racco by the end of 2026. Jin said the company was under pressure to meet the target, and could resort to promotion campaigns or adding new features if demand disappointed.
Capitalising on launch’s momentum
BYD Auto Japan President Atsuki Tofukuji said the goal of securing 10,000 orders by year-end was driven more by conviction than detailed market analysis, as the company seeks to build on the momentum of the model’s launch. “It’s really a matter of determination and gut feeling,” he told reporters at a roundtable, adding that annual sales at around that level should be sustainable from next year if dealerships can generate roughly one order per day on average.
The model offers up to 320 km (199 miles) of driving range and is the first electric mini-car to feature sliding rear doors, a popular feature among Japanese buyers.
Hiroki Ihara, an analyst at Tachibana Securities, said prior to the launch that BYD likely wanted to boost brand awareness by adding a ‘kei’ car to its lineup.
Kei cars translate as “light vehicle”, a segment that makes up about a third of Japan’s auto sales and has traditionally been served almost entirely by local automakers such as Honda and Suzuki.
At the end of 2025, BYD had sold just over 7,400 vehicles in Japan since its launch in early 2023.
The launch highlights the growing challenge Chinese automakers pose to Japanese rivals, which have been losing ground to BYD and other domestic EV makers in China, the world’s largest auto market.
