To my Tokyo ears, Shanghai is eerily quiet. Both mega cities are 30 million plus, not lacking in the hustle and bustle of human traffic. The difference to me is decibels on the roads.
You can identify Electric Vehicles (EV) by their green license plates in China, and just eyeballing it, I felt that that EVs make up 50 to 60% of cars on the roads in Shanghai. Most motorized 2-wheeled vehicles appear to be electric, frequently sneaking up behind tourists not in the know.
When I walked the Shanghai sidewalks, I was more aware of the friction of tire on road, and wind on windshield.
When I returned to Tokyo, I became very conscious of the rumble of the internal combustion engine (ICE) particularly during acceleration and deceleration. These sounds were clearly noticeable at traffic lights, where the vibration of decelerating, idling and accelerating engines are the background music to city life.
Despite the Toyota Prius dominating the new energy vehicle mindshare since 1997, and the Nissan Leaf being the first mass market electric and zero-emission vehicle in the world in 2009, the Japanese automobile industry drifted wide on the track, while the Chinese auto manufacturers swept by on the inside lane, and shot ahead in the EV race.
China Rising
In my 5-day tour of companies in China in the CKGSB Asia Start Program, we visited EV companies XPeng (first row of pictures) and Geely (second row of pictures), two of over a hundred automobile manufacturers in China that are fiercely competing in the world’s largest EV market.
Walking through Geely’s expansive showroom in Hangzhou, one is amazed by international breadth of its brands. Established in 1986, this Guangzhou company has been manufacturing cars since 1997, and has established itself globally with brands like Volvo, Lotus, Proton and London Black Cabs, and transitioning powerfully to a wide range of EV, Plugin Hybrid and range-extended EVs. Geely has become a high-tech company, with research centers in Sweden and the UK complementing the two in China.
Walking through XPeng’s facilities in Guangzhou, one is impressed by its Tesla-like vibe, from its stylish and popular P7 sports sedan to its stunning low-altitude flying car. XPeng’s factory is highly automated. This is a high-tech company, with nearly 40% of its 20,000 employed as researchers, generating thousands of worldwide patents, building car systems that perceive the environment and make decisions to control the vehicle across a wide variety of driving environments. The idea is to make their smart cars as intuitive as our smartphones.
Geely and XPeng are just two of the many manufacturers that helps China sell far more cars than any other economy in the world. In 2024, Chinese manufacturers sold over 31 million vehicles, about the same number as manufacturers in the US, Europe and Japan combined. Of the nearly 90 million cars sold in 2024, about 17 million of those cars were EV or hybrid. China alone accounted for 11 million battery electric vehicles (BEV) and plug in hybrids (PHEV) in 2024.
Japan’s Hybrid-First, Safety-First Strategy
I lived in Bangkok from 2022 to 2025, and I witnessed a transportation transformation. Once dominated by Japanese brands, the roads of Thailand are filling up with Chinese EVs. While Japanese brands are still dominant, statistics confirm this trend. When comparing ASEAN automobile sales in H1 2025 compared to H1 2024, Chinese automobile brands increased share by 5%, while Japanese automobile brands dropped 7%, according to PWC.
In Japan, China’s biggest EV brand, BYD, has grown significantly, but still in absolute numbers, its 2,000 plus sales in 2024 are tiny. The reason is because Japan has done little to grow the EV market in its home base. As stated in this Japan Times opinion, Japan’s reluctance to embrace EVs is a concern.
“If Japan continues to lag, its manufacturers won’t be competitive in the global market, yet another example of the Galapagos syndrome.”
In Japan, consumers are unwilling to buy EVs today. They will, however, drive hybrids.
According to a 2024 S&P global ratings analysis of the Japan EV market, “the proportion of respondents with at least some intent to buy a battery electric vehicle was 28%, compared with 45% for hybrids.” These numbers have not changed since 2019.
The greater interest in hybrids in Japan reflect the most common resistance to EVs globally – range anxiety.
Many Japanese in cities do not have access to private parking, so they do not have access to home chargers. And according to the S&P report, Japan had a little more than 31,000 chargers (as of mid July, 2024), of which only a third are fast chargers. (China, on the other hand, had nearly 13 million chargers by the end of 2024, which was a 49% growth YOY.) In Japan, getting stuck in the middle of no where without electricity is a very real possibility, so gas is still the way to go, hybrid or not.
There is also a reluctance by the auto industry in Japan to go too fast. Why cannibalize Japan’s highly successful gas-powered auto industry, and risk social disruption before it’s necessary to do so?
“There are 5.5 million people involved in the automotive industry in Japan,” said Toyota’s chairman, Akio Toyoda. “Among them are those who have been doing engine-related (work) for a long time. If electric vehicles simply become the only choice, including for our suppliers, those people’s jobs would be lost.”
That concern appears to be widespread as the Japanese Automobile Manufacturers Association (JAMA) continues to lobby its government to ensure a hybrid first policy. The Japanese government will not punish automobile manufacturers, as the Chinese government does for manufacturing ICE vehicles. Instead, the Japanese auto industry has a goal of all new vehicles being “electrified” by 2035, which includes hybrids and plug-in hybrids. In other words, pure gasoline engines will not allowed to be sold from 2035, but gasoline-power can still be part of hybrid vehicles at that time.
Which Strategy Wins
Shanghai’s quieter roads are not the result of just great engineering. They reflect an industrial system designed to accelerate electric adoption at scale.
Tokyo’s louder roads reflect a different path. Japan’s automakers and policymakers have prioritized a managed transition, leaning on hybrids to cut fuel use, while protecting a gas-engine centered industrial base, and all the jobs tied to it.
Meanwhile, BYD and others will do their best to persuade early adopters in Japan, while Toyota will try to establish an EV presence in China. The more intense contest is outside these home markets, in Southeast Asia, Europe and North America. In ASEAN, Japanese brands still lead, but Chinese brands are gaining share through lower prices, broader lineups, and faster product cycles.
China’s challenge is not risk-free. They are facing political resistance and trade barriers in the US and Europe, These factors may buy some time for Japan’s great auto makers internationally. Additionally, Japan’s hybrid-first positioning, and consumers’ current aversion to EVs may buy some time for them locally.
Japan needs to use that time to scale the pieces that decide the next decade: batteries, software, charging partnerships, and cost competitive EV systems.
There is no question that the roads of Japan will get quieter over time. But will Japan’s industry shape that quiet, or import it?
ARTICLE FAQS
- Why does Shanghai feel quieter than Tokyo?
Because electric vehicles now dominate China’s major cities. EVs produce far less mechanical noise than internal combustion engines, especially at low speeds. In Shanghai, where electric cars and scooters are widespread, the absence of engine vibration and exhaust noise creates a noticeably calmer soundscape. Tokyo, still dominated by gasoline and hybrid vehicles, retains the familiar rumble of combustion engines.
- How did China move so far ahead in electric vehicles?
China made electric vehicles a national industrial priority. It invested heavily in battery supply chains, charging infrastructure, and large scale manufacturing. Companies such as BYD, XPeng, and Geely operate in a system that rewards rapid iteration and scale. Government support, consumer incentives, and infrastructure investment created a feedback loop that accelerated adoption.
- Why has Japan fallen behind in the EV transition?
Japan focused on hybrids rather than full electrification. This approach reduced emissions while protecting its existing automotive workforce and supply chains. It also reflected consumer concerns about charging access and range. While this strategy reduced risk, it slowed Japan’s transition as global markets moved more aggressively toward full electrification.
- Why are Chinese EV companies gaining global influence?
Chinese manufacturers combine cost efficiency, vertical integration, and fast product cycles. Many produce batteries, software, and vehicles in-house, allowing rapid innovation. Their scale allows them to lower prices quickly and expand internationally. As a result, Chinese brands now compete directly with global automakers in markets across Asia, Europe, and beyond.
- What is at stake for Japan’s auto industry?
Japan faces a strategic dilemma. Its hybrid leadership bought time, but global markets are shifting toward full electrification. If Japanese firms delay too long, they risk losing technological leadership and export competitiveness. The challenge is transitioning without undermining domestic employment and industrial stability.
- What does this shift mean for the future of mobility?
The future points toward quieter cities, cleaner air, and vehicles defined more by software than engines. The central question is not whether this transition will happen, but who will shape it. Countries that master batteries, software, and manufacturing scale will define the next era of mobility. Those that hesitate may find themselves importing the future rather than building it.
Completely agree with you, Roy. The charging infrastructure is one side of the equation, but the other is the car’s electrical architecture – particularly 400 V versus 800 V systems. Many of the more advanced EVs now, including models from Kia and Hyundai, BYD’s higher‑end platforms, and cars like the Porsche Taycan, are moving to 800 V architectures, which allow much faster DC charging when the charger can deliver it.
For example, Kia’s E‑GMP platform (EV6/EV9) can charge from about 10% to 80% in roughly 18–20 minutes on a 350 kW fast charger, which is significantly quicker than many 400 V EVs. That’s why it’s not enough just to build more fast chargers – the cars themselves also need to be capable of high charging power. If a car is limited to around 120–130 kW DC, it will still take noticeably longer to charge even when plugged into a high‑power station. There are no Japanese makers on 800V architecture. Trust me I am looking for one.
The other potential game changer is solid‑state batteries. Toyota and partners have announced plans to introduce solid‑state packs later this decade, aiming for much higher range and roughly 10‑minute fast charging from 10% to 80% state of charge. Once large Japanese manufacturers start deploying these at scale, charging speeds – and the broader EV landscape in Japan – could shift very quickly.