Teslas are selling everywhere but in Japan

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Posted on
August 08, 2020
by
Charles Morris

Tesla has conquered most of the known world. In 2019 it sold a global total of 367,500 units, as Model 3 took the title of top selling plug-in car in Europe, to the consternation of the proud German automakers. Tesla has sales centers in 33 countries on four continents, and Superchargers in 50. It even has outposts in places like Kazakhstan.

Above: Tesla in Japan (Source: InsideEVs)

However, the world’s third largest auto market has steadily resisted Teslamania. As Peter Lyon writes in a recent article published in Forbes, Teslas are still rare birds in Japan. Tesla doesn’t release detailed sales figures by region, but Lyon’s sources estimate that the company sold fewer than 1,300 units in Japan in 2019—a rounding error compared to the country’s total auto sales of 5.2 million.

It’s not as if Tesla hasn’t tried to be big in Japan. It shipped the Roadster to the island nation in mid-2010. In 2014, Elon Musk personally delivered the first Model S at a glitzy launch event, and predicted that Japan would become Tesla’s number-two market. Nothing of the kind has happened. Six years later, about all Tesla can boast of is that it’s the best-selling imported EV brand.  Lyon’s source says Tesla accounted for about 90% of imported EVs sold last year. However, that 1,300 or so cars in a year is small potatoes compared to Japan’s biggest selling EV, the Nissan LEAF, which sold an average of 1,650 units per month in 2019.

It’s not as if the Japanese aren’t plugging in. ABB estimates that there are over 250,000 plug-in vehicles in the country, served by 7,000 DC fast chargers and 18,000 AC chargers.

It’s not as if Tesla isn’t popular elsewhere in Asia—on the contrary. In China, sales are skyrocketing—in Q2 2020, Tesla’s revenue in China more than doubled compared to the previous year, to $1.4 billion, making it over 23% of the company’s global revenue. The Shanghai Gigafactory is now shipping China-made Model 3s, and plans to add Model Y to the mix soon, so the upward trend seems likely to continue. In South Korea, Tesla had its best month ever in June, selling 2,827 vehicles, according to Reuters. In the first four months of this year, EV sales increased by 40%, a trend mostly attributable to Tesla. A hive of activity can also be found at Tesla sales and service centers in Taiwan, Hong Kong and Macao.

Above: Japanese Pro Surfer Akira Shindo with his Tesla Model X (YouTube: Tesla)

Why is the Japanese market singularly resistant to Tesla? The most obvious answer is that the market is famously resistant to all foreign brands. In 2019, every single one of the top ten brands was Japanese. Number eleven, Mercedes, sold fewer than 67,000 units, compared to number-one Toyota’s 1.5 million.

Peter Lyon believes that there are more subtle, cultural reasons as well. He spoke with several Japanese Tesla owners and would-be owners, and they told him potential buyers are skeptical about Tesla’s limited number of sales and services centers in the country (only four to date).

Tesla also suffers from poor brand recognition in Japan. A 2019 Nikkei Research poll found that only half of 1,000 respondents had heard of Tesla, whereas 98% were familiar with the Nissan LEAF. Lyon also writes that Japanese buyers tend to expect a personalized, white-glove buying experience. Unlike in the US, where many buyers are only too happy to cut auto dealers out of the equation, Tesla’s direct-to-customer sales model may not be such a good fit for the Japanese market.

Is Tesla destined to remain small in Japan? The California cowboys have played catch-up in foreign markets before. Tesla struggled in China for years, but it seems to have found the right formula now. The company also got a slow start in Germany, another market where buyers are famously loyal to their powerful local brands, but things are picking up speed there as well. If Tesla invests in more service centers, a stronger, more locally-focused sales process, and perhaps some of the Johnny Appleseed-style marketing that served it so well back in the early days in the US, it may someday see the sun rise on better sales in Japan.

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Written by: Charles Morris; Source: Forbes

Posted in

Electric Vehicles,

Tesla,

Tesla Japan,

tesla news,

TSLA


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