BYD has entered the Japanese kei car market with the Racco, an electric car built specifically for the country’s compact car segment. Its top trim delivers 320 km of range, making it the first compact electric car in the market to pass 300 km, according to ITHome.

Kei cars are a Japanese vehicle class with strict size and power limits, and the segment has long been dominated by domestic automakers such as Honda, Nissan, Suzuki, and Daihatsu. The Racco is BYD’s first attempt to compete in that space.

Price undercuts Nissan’s Sakura

The Racco starts at 2.145 million yen, about $13,100, with Japan’s consumption tax included. A national EV subsidy of 150,000 yen (~$915) further lowers the cost for buyers.

Before tax and the subsidy, the base trim is priced at 1.95 million yen (~$11,900), making BYD’s offering cheaper than competitor Nissan’s Sakura electric kei car, according to CarNewsChina. BYD has launched two battery options, with the base trim featuring a 22.4 kWh pack rated for 210 km and the higher trim featuring a 35.84 kWh pack rated at 320 km.

Equipment list reads bigger than the car

Despite its size, BYD has packed the Racco to the brim with features. Higher trims include a power sliding door that opens with a foot gesture, an NFC phone key, heated front seats and steering wheel, and vehicle-to-load capability for running appliances off the car’s battery. Given its size, you wouldn’t expect much in terms of cargo space, but BYD claims it can grow to a substantial 1,372 liters with the rear seats folded flat.

With the Racco, BYD has entered a segment led by Honda’s N-Box, which sold more than 56,000 units in Japan during the first quarter of 2026 alone. BYD has used a similar low-cost, high-feature strategy to make its Seagull one of the cheapest EVs on sale globally. The Racco is the first real test of whether that formula can dominate the Japanese kei car market as well.