Tesla Model 3 sales skyrocket in Japan as price reaches all-time low

Sales of the Tesla Model 3 electric car have skyrocketed by 1300% in Japan, following a price drop that coincided with an EV subsidy boost, bringing its final price to the equivalent of near $A40,000 – about 40% per cent cheaper than the asking price in Australia.

Japan was once pegged as a key market by Tesla CEO and co-founder Elon Musk, but it had proved until now nearly impenetrable.

That may seem surprising for the home of the Nissan Leaf, but the Japan Times says not many Japanese have heard of Tesla, and those who have likely have read negative headlines, and there is a hesitancy to buy foreign brands in a country that has its own strong auto manufacturing industry and expectations of hands-on customer service.

But a recent 24% price drop, along with an increase in state and Tokyo EV subsidies, appear to have finally cracked the market for Tesla.

As in Australia, Tesla does not report local sales figures in Japan. But new figures shared by the Japan Automobile Importers Association indicate that after other manufacturers are subtracted from imported auto sales figures, Tesla sales have increased 13-fold from the same time in 2020.

The numbers may seem low – just 588 units were sold by Tesla in total in March.

But a report from Yahoo Japan notes that with national and Tokyo subsidies for electric vehicles raised to ¥800,000 (previously ¥400,000) and ¥450,000 (previously ¥300,000), respectively, the base price of a Tesla Model 3 is now just ¥3,366,400, which equates to just a little more than $A40,000.

Yahoo Japan credits the price drop with the switch to the Shanghai-made Model 3, bringing with it reduced manufacturing, importation and battery costs.

It means that the Model 3 now appeals to a wider range of car buyers, notably mostly younger buyers who may be more aware of Tesla as a brand, and who are more comfortable with purchasing online and foregoing the white-glove treatment older car buyers expect.

Apparently, they are also willing to wait up to almost six months for a vehicle to arrive.

And with the long-range Model 3 costing just an extra ¥700,000 (about $A8,400) than the Standard-Range Plus, new buyers are more often than not opting for the mid-range Model 3.

Yahoo Japan reported that Tesla officials said: “Sales are extremely strong. The delivery period has been extended to 24 weeks. The long-range is the most popular. Young people buy a car for the first time as if they were buying a smartphone. There are many purchases. “