Buying an EV in Japan gets less generous next year. The Ministry of Economy, Trade and Industry (METI) said on Wednesday, Oct. 21, 2026, that the maximum base subsidy for a newly registered electric car under its Clean Energy Vehicle (CEV) program will fall 40%, from ¥1.25 million to ¥750,000, for vehicles registered on or after Jan. 1, 2027, Reuters and Newsquawk reported.
The new caps
- EVs: ¥1.25 million to ¥750,000 base. Including the GX add-on, which falls from ¥50,000 to ¥30,000, the top amount goes from ¥1.3 million to ¥780,000, Nikkei reported.
- Plug-in hybrids: ¥800,000 to ¥480,000 base (¥850,000 to ¥510,000 with the add-on, per Nikkei).
- Fuel-cell vehicles: ¥1.45 million to ¥870,000 base (¥1.5 million to ¥900,000 with the add-on, per Nikkei).
Overall, Nikkei said the new amounts are 60% to 80% of today's levels, depending on the vehicle.
Why Japan is doing it
Nikkei said EV sales have been strong, and METI is cutting the per-car amount so the program can continue within its budget. The ministry had ¥110 billion set aside in the fiscal 2025 supplementary budget and had warned in September that the program could end by late December, closing applications early if the money ran out. The subsidy varies by maker and vehicle performance, and the current categories have applied since fiscal 2023.
What it means for buyers
Because the change applies by registration date, anyone buying a qualifying EV in Japan, including a Tesla, gets the current amount only if the car is registered by Dec. 31, 2026, and only while the current budget lasts. How much a specific Tesla model will receive under the new caps has not been published yet. For other EV policy news, see our EU company-car story.