[Summary]

There is a possibility that China's Chery Automobile will develop EVs in the Japanese market.

According to reports, there is a plan to introduce BEVs for Japan in 2027 through Electric Mobility Technology Pte. Ltd. (EMT), a Singaporean company involving Chery Automobile, Autobacs Seven, Jiangsu Yueda Group, Guoxuan High School, Anest Iwata, and others, and plans to expand to multiple models by 2029.

However, I would like to draw a line here first. In a disclosure dated May 11, 2026, Autobacs Seven confirmed that it is investing in EMT, but explained that ``no decisions have been made at this point'' regarding specific measures to utilize the store network, such as sales and maintenance as reported.

In other words, what has been confirmed at this stage is "investment in EMT." It is appropriate to treat the plans for sales in 2027, the rollout of four models, and the use of Autobacs stores as plans and observations based on news reports.

Still, this story is not small. If implemented, the existing car supplies and maintenance network will instantly fill in the gaps of ``brand trust'', ``sales contacts'', and ``maintenance concerns'' that Chinese EV manufacturers tend to struggle with in Japan. For Japanese manufacturers, the selling model may be a more unpleasant attack than the vehicle itself.

The point of discussion this time

The key point this time is not just whether Chery will export cars to Japan.

More importantly,

*The Chinese side owns the EV platform, batteries, and mass production costs

  • The Japanese side will supplement sales and maintenance contacts, quality sense, and localization know-how.
  • With new branding, there is room to sell it as an ``EV for the Japanese market'' rather than a ``Chinese car itself''

That's the combination.

This is different from a model like BYD, which is making head-on breakthroughs with its own brand. The Chery EMT concept is similar to a light asset model that relies on existing sales infrastructure. This is the strategic key.

Sorting out the facts

Autobacs Seven has confirmed its investment in Electric Mobility Technology Pte. Ltd. On the other hand, the company clarified that the content reported in the electronic version of the Nihon Keizai Shimbun that it would be selling EVs made in China was not an announcement made by the company. Maintenance and sales using the store network are currently under consideration.

Meanwhile, overseas reports have reported that EMT plans to use Chery's technology to sell vehicles produced in China in Japan, with sales to begin in 2027 and four models to be rolled out by 2029. This is not officially confirmed information, but is read as a ``scenario if it comes true'' in the strategy note.

Looking at Chery's background, the move to enter the Japanese market itself is not sudden. The company's 2026 international strategy focuses on global expansion, electrification, and partner collaboration. In 2024, the company aims to invest 10.544 billion yuan in research and development, increase global R&D personnel to 13,310 people, and is also progressing with the introduction of new energy vehicles.

Why Japanese market?

Japan's BEV market is still small compared to the rest of the world.

According to statistics from the Next Generation Automobile Promotion Center, the number of EV sales in 2024 will be 64,952 units. This is down from 79,952 units in FY2022 and 84,304 units in FY2023, and even including PHEVs and FCVs, Japan's new energy vehicle market is still at a stage before full-scale adoption.

This "smallness" on the other hand provides room for entry.

Domestic manufacturers are very strong in HEVs. Hybrids, especially Toyota, are highly profitable and have high brand trust. That is why it is easy to be cautious about introducing low-priced BEVs. In the Japanese market, there are light EVs such as the Nissan Sakura and Mitsubishi eK Cross EV, but the choice is still limited.

If Chery EMT is aiming for this blank space. A compact BEV with a low price, an urban SUV, and an EV for light commercial use. Japanese manufacturers seem to be guarding this area, but in reality there is still a small selection of products.

Meaning of Autobacs network

Autobacs' strength is not in making cars. It's a point of contact with people who own cars.

According to official information, the number of Autobacs stores in Japan is 519 as of March 31, 2026. In a broad sense, the group's store/sales network is said to be around 1,300 stores in Japan and overseas. Users visit on a daily basis to purchase tires, oil, vehicle inspections, maintenance, and supplies.

The most difficult part of selling EVs is not simply having a display vehicle on display. Where will the vehicle be inspected after purchase? Who will perform the battery diagnosis? How much responsibility will they have over accidents, sheet metal, tires, and charging? If that aspect is vague, it is difficult to buy even if it is cheap.

If Autobacs were to get seriously involved, this anxiety could be alleviated to a large extent. It is faster to convert existing car life touch points to EVs than to create a new exclusive dealer network. This is the scary part for traditional automakers.

Market Scenario from 2027 to 2029

2027: First, test price and security

If the first car is released in 2027, the first challenge will be to break through the psychology of ``Is it okay to buy a Chinese EV in Japan?'' rather than the number of units sold.

A brand exclusively for Japan, involvement of Japanese engineers, tuning for the Japanese market, and a domestic maintenance point of contact. Initial velocity changes depending on how much these elements can be shown.

If you sell only on price, you will be treated as cheap. On the other hand, if the price is too high, the meaning of being a Chinese EV will diminish. It's quite difficult here.

2028: Comparison of light and compact EVs

If there are no major quality issues in the first year, in 2028 it will be compared with Nissan Sakura, Mitsubishi eK Cross EV, BYD's compact EV for Japan, and light commercial EVs from Toyota, Daihatsu, and Suzuki.

At this stage, the market is looking at practical costs rather than range.

*Vehicle price *Subsidy applicable *Battery warranty *Vehicle inspection/maintenance costs

  • Standard equipment for ADAS
  • Resale value

Japanese consumers are conservative, but in the light car market they are quite sensitive to total payments. If they are cheap, can be maintained nearby, and have easy-to-understand warranties, there will be a certain level of demand.

2029: Multiple car models will become a real threat

If, as reported, the number of models expands to four by 2029, the competitive axis will change.

If it's just one car model, it'll be a hot topic. As the number of models increases, both dealers and maintenance personnel learn more and accumulate parts inventory and diagnostic know-how. Once the models are available in compact, SUV, commercial, and family formats, users will begin to have choices.

At this stage, what Japanese manufacturers dislike is more the change in price standards than the number of units themselves. If Chinese-produced EVs are priced at this price with this equipment, it will be difficult to explain the prices of BEVs from domestic manufacturers.

After 2030: Domestic production is not a favorite but an option

Discussion of domestic production beyond 2030 is currently quite far away.

However, if they decide to proceed with production in Japan, the reasons will likely be politics, systems, and brand rather than cost. Tariffs on Chinese EVs, subsidies, geopolitical risks, public procurement, and consumer sentiment. In order to avoid such friction, it makes sense to carry out certain processes within Japan.

The other is the right-hand drive market. If we can create a model for development, certification, and quality assurance in Japan, we will have a foothold to expand to the UK, Australia, New Zealand, and parts of ASEAN. Even if the number of vehicles in the Japanese market itself is not large, it can be used as a "testing ground for right-hand drive EVs."

Impact on Japanese manufacturers

Toyota/Honda/Nissan

For Toyota and Honda, the impact on sales numbers in the short term is likely to be limited. It is not large enough to affect the profits of both companies.

However, it is not interesting to have standards for low-priced BEVs set by an outsider. If the Chinese decide on the prices of urban EVs and light commercial EVs while they are winning in HEVs, they will continue to explain why domestically produced BEVs released later are expensive.

Nissan and Mitsubishi are more direct. As new price-competitive models enter the light EV market, which was pioneered by the Sakura/eK Cross EV, comparisons in post-subsidy prices, cruising range, equipment, and warranties will become more difficult.

Parts Manufacturer

For parts manufacturers, there is a mix of threats and opportunities.

For companies that rely solely on affiliated transactions with domestic vehicle manufacturers, the shift to EVs and the influx of Chinese supply chains is likely to create headwinds. On the other hand, new sales opportunities will emerge for companies that can penetrate the Chinese EV supply chain in areas such as thermal management, electrical equipment, in-vehicle software, lightweight components, inspection equipment, and charging.

The market probably hasn't factored this in carefully yet. If we look at the entry of Chinese EVs into Japan only in terms of sales volume, it will be small, but if we expand it to include peripheral demand for maintenance, parts, diagnostics, and battery safety, the number of stocks to look at will increase.

Dealer/Used Car/Maintenance

Sales and after-sales service will be affected the most.

Japanese car sales have been built on the trust of manufacturer-affiliated dealers. When car parts stores, maintenance chains, imported EVs, and online sales are mixed in, the points of contact with users become dispersed.

There will be competition not only for profit margins on new car sales, but also for customer contact points, including maintenance, vehicle inspections, used cars, insurance, supplies, and charging. If Autobacs were to start selling EVs in earnest, there is room for the company to be reevaluated as an ``after-sales service outlet for the EV era'' rather than just a retailer.

Checkpoints from an investment perspective

What you should look at with this theme is the execution KPIs, not the announcement headlines.

  • EMT's official brand name, vehicle model, price, warranty conditions
  • Availability of test drives, sales, and maintenance at Autobacs stores
  • Is it eligible for subsidies? *Battery suppliers and safety certifications
  • Initial batch quality issues
  • Vehicle inspection, insurance, and resale service *Price difference between BYD, Nissan, Mitsubishi, and Toyota light commercial EVs

In the stock market, the first thing that comes to mind is Autobacs Seven (9832). However, as the company itself has explained that specific measures have not been decided, it is not yet the stage to factor in numbers in the short term.

Rather, what needs to be confirmed is whether it connects with Autobacs' existing strategy. The company is already expanding its contacts with electric mobility and BYD sales locations. If EMT is to get on board, the medium-term theme will be to create infrastructure for mobility life, rather than just selling EVs.

Risk

This strategy also has many risks.

First, psychological resistance to Chinese cars still remains. You can't break through on price alone. Safety, battery deterioration, software updates, personal information, parts supply, resale. Japanese users are concerned about small details.

Next, there is a possibility that domestic manufacturers will seriously try to match prices. If domestically produced light EVs and commercial EVs lower the real price including subsidies, the price advantage of Chinese manufacturers will shrink.

Additionally, there are geopolitical and institutional risks. Subsidy treatment for Chinese-made EVs, battery origin, tariffs, and security standards. The debates occurring in Europe and the United States may be delayed in Japan.

Lastly, there is the degree of involvement on the Autobacs side. Even though the investment is true, the destructive power of this concept will be significantly reduced unless the sales and maintenance network is fully utilized. Until it is implemented, it is best not to look at it with too much anticipation.

Summary

Chery's EMT initiative is not a story that will immediately turn the Japanese automobile market upside down.

However, if, as reported, the company launches a popular BEV in 2027, expands to multiple models in 2029, and uses Autobacs' sales and maintenance contacts, the meaning will change considerably.

This is not a simple story of “Chinese EVs coming to Japan”;

Experiment to combine China's mass production capabilities with Japan's after-sales service network

It is.

Japanese manufacturers are strong in HEVs. Therefore, it will not collapse in the short term. However, if the price standards, maintenance contacts, and battery supply chain for low-priced BEVs are created from outside, competition after 2027 will gradually become more difficult.

The market is still skeptical. In fact, Autobacs has not decided on specific plans. That's why the next thing to look at is not the announcement, but what will happen in the store.

Reference materials

This article is for educational and informational purposes only, based on public information. It is not a recommendation or solicitation to buy or sell any specific security or financial product. Although care is taken with accuracy, the content and future investment outcomes are not guaranteed. Final investment decisions should be made at your own judgment and responsibility.