Overview
- Japan will suspend the local environmental performance levy on new car purchases for fiscal 2026–27, with the central government set to fully compensate municipalities for lost revenue.
- The eco‑car weight‑tax reduction is extended two years with stricter eligibility, cutting the expected share of qualifying new vehicles from about 67% to 47% after May 2026.
- A weight‑based surcharge on electric vehicles will begin in May 2028 as a special add‑on to the automobile weight tax, covering EVs and PHVs at a lower PHV rate, with detailed design and treatment of commercial vehicles deferred to 2026.
- From January, Japan plans to raise the EV purchase subsidy by ¥400,000 to a maximum of about ¥1.3 million, lift PHV support to up to ¥850,000, and sharply reduce FCV aid to a ¥1.5 million cap from April following U.S. trade concerns over prior FCV preferences.
- The European Commission proposed replacing the 2035 engine‑car sales ban with a requirement to cut average new‑car tailpipe CO2 by 90% versus 2021 and moved to expand the carbon border adjustment to roughly 180 additional products, steps that still need EU approval.