The Tokyo Metropolitan Government is preparing to expand its electric vehicle incentive programme, proposing higher subsidies for battery-electric and plug-in hybrid vehicles as part of efforts to accelerate the transition to low-emission transportation.
Under the proposed revision, the maximum subsidy available through Tokyo’s programme would increase by ¥300,000, bringing total support from the metropolitan government to as much as ¥1.3 million (approximately €7,025).
The measures are intended to encourage greater adoption of electric vehicles in Japan, where EV market penetration remains significantly lower than in many other major automotive markets.
Basic EV Subsidy to Double
The proposal would double Tokyo’s base subsidy for electric vehicles from ¥100,000 to ¥200,000.
Existing incentive programmes linked to vehicle-to-home (V2H) and vehicle-to-load (V2L) capabilities, charging and discharging equipment, renewable electricity contracts, and residential solar installations would remain in place.
These programmes currently provide additional support that can significantly increase the total incentive available to eligible vehicle buyers.
Greater Focus on Manufacturer Sustainability Efforts
Tokyo is also planning to revise the way vehicle manufacturers are evaluated for additional subsidy payments.
The current framework assesses automakers based on criteria including zero-emission vehicle sales, the availability of electrified vehicle models, and broader decarbonisation initiatives.
At present, Toyota, Nissan and Honda qualify for the highest manufacturer-related subsidy category of ÂĄ400,000.
Tesla, BMW, Mercedes-Benz and Mitsubishi Motors currently receive incentives of ÂĄ300,000, while BYD qualifies for ÂĄ100,000.
Under the proposed changes, the metropolitan government would place greater emphasis on manufacturers’ overall green transformation strategies and sustainability efforts.
As a result, the maximum score available under this category could increase from ÂĄ200,000 to ÂĄ400,000, raising the manufacturer-related incentive component to as much as ÂĄ600,000.
Additional Budget Allocated
To support the expanded programme, Tokyo has allocated an additional ÂĄ8.3 billion in a supplementary budget proposal that is expected to be submitted to the Tokyo Metropolitan Assembly this month.
Final programme details are expected to be confirmed following approval later in June.
Combined Incentives Could Reach ÂĄ2.6 Million
The proposed metropolitan subsidies would be available in addition to incentives offered by Japan’s national government.
Earlier this year, the national government increased the maximum EV subsidy to ÂĄ1.3 million and introduced additional support measures for vehicles equipped with batteries supplied by Japanese manufacturers.
According to reports, buyers of models such as the Toyota bZ4X could potentially qualify for both the maximum national subsidy and the highest Tokyo incentive.
In such cases, total support could reach ÂĄ2.6 million.
Based on a vehicle price of approximately ÂĄ4.8 million, the effective purchase cost could fall to around ÂĄ2.2 million after subsidies are applied.
EV Adoption Remains Low in Japan
Despite growing government support, electric vehicle adoption in Japan remains relatively modest.
According to market data cited by Nikkei, battery-electric vehicles accounted for 1.6% of new passenger vehicle sales in 2025.
The share increased to 2.5% during the first four months of 2026, indicating gradual growth but remaining well below EV adoption levels seen in Europe, China and several other leading automotive markets.
Tokyo’s planned subsidy expansion reflects increasing efforts by policymakers to accelerate electrification and support the broader decarbonisation goals of Japan’s transportation sector.