The subsidy to promote the introduction of clean energy vehicles (CEVs) in FY2025 will apply to new registrations of new vehicles from April 1, 2025.

Although the subsidy system basically follows that of the previous year, there are two major important changes in this year’s subsidy program.
(1) A subsidy of up to 50,000 yen will be added for active adoption of green steel.
(2) The allocation of points for maintenance systems and ensuring sustainability throughout the life cycle has been increased.

As a result, Toyota/Lexus was the only company eligible for the full amount of the subsidy, with a maximum of 50,000 yen.
In addition, eight other brands, including Nissan and Honda, received an additional 40,000 yen, resulting in across-the-board increases for major Japanese OEMs.
Models with particularly large increases include the Alfa Romeo Tonale (PHEV, +140,000 yen), Citroen/Peugeot (PHEV/BEV, max +240,000 yen), and Hyundai Kona/Ioniq 5 (BEV, max +320,000 yen).

On the other hand, there are still some uncertainties in the subsidy system. For example, in the item of charging infrastructure development, it has not been clarified whether the emphasis is on the number of chargers or the number of fast chargers, and what points are deducted regarding the restriction of the use of other brand vehicles.
The scoring results are not disclosed, and the system needs to be more easily understood as an incentive measure to be contributed from taxpayer funds.

PHEV/BEV/FCEV sales in 2024 were 104,000 units, down 27.6% from the previous year. Breakdown,
PHEV: 43,000 units, down 17.3% year-on-year
BEVs: down 33.9% to 60,000 units
FCEVs: up 65.7% to 696 units

The decrease in BEVs is due, in particular, to the fact that the effect of new mass-market models such as the Toyota Prius and Nissan Sakura is fading.

At the moment, the Hyundai Inster (April 10, 2025) and BYD Sealion 7 (April 15, 2025) have been launched. the Inster has yet to announce its CEV subsidy amount, and Hyundai is taking its own initiative to cover the cost if it is less than 350,000 yen. the Inster retails price of 2,849,000 yen and up, so it is guaranteed to be around 2.5 million yen after the subsidy; the Sealion 7 has a CEV subsidy amount of 350,000 yen, which makes it even more competitive from its retail price of 4,950,000 yen and up.