Hyundai is launching its most affordable compact electric car in Japan, aiming to compete in a market dominated by Japanese auto giants specializing in hybrid petrol-electric vehicles. Hyundai Inster marks the company’s latest effort to penetrate a market where electric vehicles (EVs) have seen limited popularity.
The Inster will be available at an entry price of 2.85 million yen ($18,000), making it the cheapest compact EV in Japan. This price undercuts China’s BYD Dolphin, which debuted in 2023 at 3.63 million yen, reflecting Hyundai’s adoption of a low-cost strategy similar to that of BYD. Hyundai announced the launch during the Tokyo Auto Salon motor show, with orders opening on Friday. The Inster, first introduced in Europe last year after its debut in South Korea as Casper Electric aims to offer a competitive option in Japan’s EV market.
Despite the price advantage, Hyundai faces stiff competition in Japan, particularly from Nissan Motor’s Sakura, a popular EV in the “kei car” category. The Sakura, priced at 2.60 million yen, led sales in its segment but still saw fewer than 23,000 units sold in 2024, a nearly 40% drop from the previous year. This decline reflects the overall challenges EVs face in Japan’s passenger car market, which totals around 4 million annual vehicle sales.
Hyundai’s performance in Japan has been modest, with only 607 vehicles sold last year, compared to 2,223 units by BYD. Tesla, another foreign competitor, has not disclosed its Japan sales. Hyundai re-entered Japan’s passenger car market in 2022, focusing exclusively on electric and fuel cell vehicles after exiting in 2009 due to poor sales. The company, which forms the world’s third-largest auto group alongside Kia, hopes the Inster will strengthen its foothold in a market dominated by local leaders like Toyota and Honda.
With its aggressive pricing strategy and compact design, the Inster represents Hyundai’s commitment to gaining traction in Japan’s challenging EV market. The move could pave the way for increased competition and broader adoption of electric vehicles in the country.