In the birthplace of Toyota’s Prius, hybrids now reign supreme

TOKYO: Hybrids are selling better than ever in Japan.

They’re on track to exceed half of domestic passenger vehicle sales for the first time next year, after surpassing the combined share of gasoline and diesel cars for the first time in 2023, according to Bloomberg Intelligence.

The trend is a long time coming, given Toyota Motor Corp. released the Prius - the world’s first mass-produced hybrid vehicle - in 1997.

As many other developed markets press manufacturers to go fully electric, Japan’s biggest carmakers have been notoriously reluctant and only recently have promised to roll out a wider slate of battery-only models in the next two to three years.

In addition to domestic manufacturers wanting to play to their strengths, high prices for imported EVs - Tesla Inc.’s Model 3 sedan starts at ¥5.61 million ($38,750), compared to ¥3.2 million for the Prius - limited charging infrastructure and range anxiety have dampened drivers’ enthusiasm about making the shift to EVs.

"In Japan, hybrids are popular because they’re affordable and reliable, since they don’t rely on the existence of strong charging infrastructure,” said Bloomberg Intelligence senior auto analyst Tatsuo Yoshida.

New passenger-car sales, including the lightweight "kei” category, were 51% gasoline and 43% hybrid in 2022. Diesel models accounted for 4% of the market, while battery-electric vehicles trailed far behind at 2%, according to data compiled by Bloomberg Intelligence.


Hybrids are poised to gain market share beyond 2024, Yoshida said, as gasoline loses further ground and BEVs climb to double digits closer to 2030. He expects two-thirds of sales to be hybrids before the end of the decade.

While the Prius is arguably the most recognizable, Toyota has several long-serving hybrids, including the RAV4 sport utility vehicle and Camry sedan.

Other popular models in Japan include Honda’s Accord, Volkswagen’s Golf GTE and Hyundai’s Elantra Hybrid.

For all the dominance of hybrids at home, Japanese carmakers do have EV ambitions.

Toyota aims to sell 1.5 million BEVs annually by 2026, and 3.5 million by 2030. Honda Motor Co. wants to produce at least 2 million in 2030, and for BEVs and hydrogen fuel cell cars to make up all sales by 2040.

Nissan Motor Co. has said BEVs and hybrids collectively will account for 44% of global sales in 2026, and 55% by 2030.

Most of them probably will be exported to the US, Europe and China, Yoshida said, where electric cars have caught on faster than in Japan.


As the world’s most prominent hybrid evangelist, Toyota continues to catch flack for ramping up BEV sales slower than environmental advocates want.

Groups led by Public Citizen last week filed a complaint with the US Federal Trade Commission accusing the company of misleading customers by using phrases like "electric” and "electrified” in reference to cars that have fuel-powered internal combustion engines, including hybrids.

For its part, Toyota has touted a "multi-pathway” approach, offering customers multiple powertrain choices based on its view that an outright shift to EVs isn’t realistic in the near term.

While it’s raised doubts, the world’s biggest carmaker has acknowledged the role that EVs increasingly will need to play, both at home and abroad.

"We understand that EVs will become a powerful force in the world economy,” a board member of the Japan Automobile Manufacturer’s Association told reporters last week.

"We don’t believe EVs are the only path to become carbon neutral, but we do think its necessary for us to nurture a market for them here in Japan.”
Autos Toyota