Chinese electric vehicle manufacturer BYD has expanded its presence in Japan with the launch of the Racco, its first electric mini car designed for the country’s highly competitive kei car segment. The move marks a significant step in BYD’s strategy to strengthen its position in Japan after entering the passenger vehicle market in 2023.
Priced from 1.95 million yen before taxes and government subsidies, the Racco is positioned as one of the most affordable electric mini cars in Japan. Although the vehicle qualifies for a lower government subsidy than the Nissan Sakura, resulting in a slightly higher effective purchase price after incentives, BYD believes its competitive pricing and feature-rich package will appeal to Japanese buyers.
The company has set an ambitious target of securing 10,000 orders for the Racco by the end of 2026, reflecting its confidence in the model’s potential to improve its foothold in the Japanese market.
Speaking at the launch, Atsuki Tofukuji, President of BYD Auto Japan, said the sales target was driven by the company’s determination to establish a stronger presence in the country rather than detailed market projections. He added that annual sales at this level could become sustainable if each dealership consistently generated around one order per day.
The Racco offers a driving range of up to 320 km on a full charge and becomes the first electric kei car to feature sliding rear doors, a practical feature that is highly valued by Japanese consumers for urban mobility and ease of access.
Industry analysts view the launch as a strategic move to enhance BYD’s brand recognition in Japan’s kei car segment, which accounts for nearly one-third of the country’s passenger vehicle sales and has traditionally been dominated by domestic manufacturers such as Honda, Suzuki, and Nissan.
According to Tang Jin, Senior Researcher at Mizuho Bank, the Racco’s pricing demonstrates BYD’s serious commitment to competing in Japan. However, he noted that the company may need to introduce promotional campaigns or additional features if demand falls short of expectations.
By the end of 2025, BYD had sold just over 7,400 passenger vehicles in Japan since its market entry in early 2023. The launch of the Racco highlights the growing ambitions of Chinese automakers as they expand into overseas markets and intensify competition with established Japanese brands, even in one of the country’s most fiercely contested vehicle segments.
