Cuts announced to Japan's eco-friendly car subsidies - NHKニュース

The Japanese government has announced a cut in its electric vehicle subsidies starting in January 2027, due to rapid budget exhaustion.

The Ministry of Economy, Trade and Industry said the maximum subsidy, worth 1.3 million yen, or 8,220 dollars, will be reduced by over 3,280 dollars.

The ministry grants purchase subsidies for electric and other environmentally friendly vehicles to promote their use. It secured some 695 million dollars as necessary expenses in the fiscal 2025 supplementary budget.

The ministry said the subsidy cuts aim to keep the program within a range it can sustain.

The maximum EV subsidy will be cut to around 4,930 dollars. The maximum subsidy for plug-in hybrid vehicles will be cut to about 3,220 dollars.

Likewise, maximum fuel cell vehicle subsidies will be reduced to some 5,690 dollars. Maximum electric kei vehicle subsidies will go down to around 2,890 dollars.

The ministry says the subsidies will not be available when the budget is used up.

It remains to be seen how the cut in the subsidies will affect sales of EVs and other eco-friendly vehicles in Japan.