Tesla Motors Inc(NASDAQ:TSLA) sales in Japan may get pressurized in Japan, thanks in large to the recent regulatory measures announced, according to a report from Business Insider. Shinzo Abe, the Prime Minister of Japan, announced that he has designed an overall growth plan for the country and as part of it the fuel-cell vehicle industry of the nation will get additional support from the administration. The high demand for plug-in vehicles makes Japan the world’s second largest market and the news from Prime Minister is an unusual move.

Tesla Motors

Abe plans to lower fuel cell cars prices

The world of renewable fuels constantly faces some kind of war between the charge-batteries and fuel cells, which is growing more severe with time. They were called ‘fool cells’ by the Tesla CEO Elon Musk at the annual meeting of the company held last month.

A Camry sized hydrogen fuel cell is scheduled for launch in Japan next year by Toyota Motor Corp (ADR)(NYSE:TM) as informed by the automaker. The news from Toyota almost coincides with that of Abe’s announcement. A price tag of $69,000 has been fixed for the new sedan, which is just $1000 less than Tesla Model S price.

“It does seem as though they’re attempting to compete in that category,” she told BI, noting that the $69,000 price tag is actually lower than the $100,000 initially floated.

By 2030, generating revenue worth 1 trillion Yen is aimed for the sector, though no announcement was made with regards to the size of subsidies provided by Abe for fuel-cell vehicles. To achieve the main target another target of bringing down the fuel cell cars prices to $20,000 has been set.

Big loss for Tesla?

It is expected that certain pricing pressure might be faced by plug-ins in Japan soon. The recent Fukushima disaster in the country has provoked the nation to focus on the electric generation sector by boosting the fuel cell production for it, as stated by Jarrem.

“We see the [fuel-cell vehicle] push as a diversionary tactic to slow down, if not completely reset, a regulatory framework scripted to support mass adoption of EVs that don’t appear ready for prime time,” wrote Adam Jones of Morgan Stanley, in a note this week. Analyst confirms that the industry is adopting fuel cell vehicles and giving up on electric vehicles.

Jeff Cobb of HybridCar said that the per capita penetration of electric vehicles in the two nations i.e. Japan and U.S. is very much similar and at the Tokyo’s Motor Show for past year Tesla was the only U.S. automaker to show up. Considering the market size, it could be a big loss for Tesla.