Hyundai Motor eyes Japan market rebound with INSTER EV

(Gwangju Global Motors)

Hyundai Motor Co. is looking to strengthen its foothold in the Japanese market with its compact electric vehicle as sales climb to a record high in the first half of 2025.

According to data from the Japan Automobile Importers Association (JAIA) released on Monday, the South Korean automaker sold 438 vehicles in Japan during the first six months of the year, its highest-ever first-half sales since its re-entry into the market in 2022. The figure represents 70 percent of its total annual sales of 618 units in 2024, while it sold 492 units in 2023.

The boost in sales is largely attributable to the launch of the INSTER EV, branded as the CASPER EV in Seoul, which began deliveries in Japan in April 2025. Monthly sales have steadily increased, with 82 units sold in April, 94 in May, and 130 in June.

Hyundai Motor exports the INSTER EV to Japan from its Gwangju Global Motors (GGM) plant in Korea. The company has invested 3 billion won ($2.15 million) to establish dedicated inspection procedures for Japanese-bound vehicles and is targeting shipments of 680 units to Japan this year.

Despite electric vehicles accounting for only about 1 percent of new car sales in Japan, Hyundai Motor is positioning the INSTER EV as a competitively priced option. The model starts at 2.85 million yen ($19,100), significantly undercutting rivals such as BYD’s Atto 3 and Toyota’s bZ4X.

The INSTER EV also qualifies for Japan’s Clean Energy Vehicles (CEV) program, receiving the maximum subsidy of 560,000 yen. In comparison, the BYD Atto 3’s subsidy was reduced to 350,000 yen under the new criteria introduced in 2025, which factor in efforts to secure critical mineral supply chains.

Japan is implementing a clean energy vehicle (CEV) subsidy system equivalent to Korea’s electric vehicle subsidy that will provide subsidies based on factors such as fuel efficiency and range, with the INSTER EV receiving the maximum subsidy of 560,000 yen. From 2025, CEV subsidies will also cover safe sourcing of key minerals, and the subsidy for the BYD Ato3 will drop to 350,000 yen.

GGM plans to increase the export volume gradually while reflecting the characteristics of the Japanese market, which is picky about quality. GGM CEO Yoon Mong-hyun said, “We invested 3 billion won to establish an inspection procedure exclusively for Japanese exports,” adding, “We are targeting 680 units to be shipped to Japan this year.”

Kia will launch the PV5 in the Japanese market from 2026 onwards and signed a local sales contract with Sojitsu General Trading, one of Japan’s top five trading companies. Unlike Hyundai Motors, Kia does not have a local corporation and as the electric light commercial vehicle (LCV) market is still small in Japan, the move aims to reduce risk by choosing a trading company sales method rather than establishing a corporation.

According to U.S. research firm Mordor Intelligence, the size of the Japanese commercial vehicle market in 2024 was 28.5 billion dollars (about 40 trillion won). As in Europe, there are a lot of ‘last mile’ logistics so 74% of this figure is the LCV market, which is a competitive market for PV5. There has been little demand for electric vehicles in this area, but Toyota, Suzuki, and Daihatsu have announced plans to release three light commercial electric vehicles by the end of 2025.