American electric vehicle maker Tesla (TSLA) plans to ramp up its presence in Japan, the world’s fourth-largest auto market, after its global vehicle deliveries fell 8% in 2025. It comes as the Texas-based automaker continues to experience an uneven rebound in sales across its major markets, with its vehicle deliveries falling short of expectations for the first quarter that ended on March 31.
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Trade TSLA with leverageTesla Eyes Expansion in Japan
Richi Hashimoto, the country manager for Tesla in Japan, told Reuters in an interview on Friday that the automaker is preparing to expand to at least 60 stores in the country. The carmaker is looking to unseat European rivals such as Mercedes-Benz (MBGAF), BMW (DE:BMW), and Volkswagen (VWAGY) to become the leading seller of imported cars in Japan as soon as next year.
What Can Stand in Tesla’s Way?
Tesla’s planned expansion in Japan comes as new vehicle sales in the country reached 4.56 million units in 2025, up about 3% from the previous year, according to data from Japanese automobile associations. This is even as S&P Global (SPG) has projected that light-vehicle sales in Japan will rise modestly in 2026.
“We expect modest 2026 improvement, driven by ongoing recovery from earlier disruptions, government investment, proactive fiscal measures, and the extension of eco-car tax breaks alongside gasoline and diesel fuel subsidy programs,” noted Stephanie Brinley, an associate director at S&P Global, in a report.
However, a key challenge ahead for Tesla in Japan includes the stagnation in the adoption of battery electric vehicles, which remains modest. Also, Japanese consumers continue to favor hybrid electric vehicles over battery electric ones, according to data from automotive data company JATO.
Is Tesla a Buy, Sell, or Hold Right Now?
On Wall Street, Tesla’s shares remain a Hold based on analysts’ consensus rating. This breaks down to 13 Buys, 11 Holds, and seven Sells issued by 31 analysts over the past three months.
However, the average TSLA price target of $395.49 implies about 10% upside.
