Byd Company Limited is taking the fight directly to established Japanese automakers by introducing a compact electric vehicle in Japan's most critical car segment.

On Tuesday, Atsushi Tofukuji, President of BYD Auto Japan, announced that after subsidies, the entry-level Racco model will be priced under 2 million yen (approximately $12,210). The vehicle boasts a driving range of at least 210 kilometers.

In comparison, Japan's best-selling electric car, the Nissan Sakura mini, has a starting price of around 2.44 million yen and a maximum driving range of just 180 kilometers on a full charge.

These inexpensive, ultra-compact "kei cars" account for nearly 40% of new car sales in Japan. The category primarily consists of micro vans or trucks that are affordable, versatile, and perfectly suited for the country's narrow streets and rural roads. The lowest-priced new gasoline-powered kei car sells for about 1.2 million yen.

By launching a kei car, Byd Company Limited is directly competing with Japanese automakers on their home turf, a market where few foreign brands have historically found success.

Although BYD's entry into the Japanese market over three years ago was slow to gain traction, the launch of the Racco demonstrates that the company has no intention of scaling back its operations in Japan.

BYD Japan President Liu Xueliang told reporters in Tokyo that cumulative deliveries in Japan are expected to reach 10,000 units by the end of this month. BYD currently operates 77 sales outlets across the country, including 56 official dealerships.