The Ministry of Economy, Trade and Industry plans to issue nonbinding price targets for next-generation cars, including electric vehicles, as part of a new three-year incentive program due to start in fiscal 2013, a METI official said Monday.
The ministry has earmarked ¥30 billion for the scheme in the initial draft budget for fiscal 2013, which starts in April.
The target prices are expected to undercut current retail prices to encourage automakers to turn out cheaper products.
Purchasers will receive subsidies to cover the difference between the target price and the price of the vehicles' gasoline-powered equivalents, the official said.
The products to be covered by the subsidy program also include plug-in hybrids, which can be recharged at home, and clean-burning diesels.
The target prices will differ by vehicle type and be lowered in stages. The maximum subsidies offered for each type will also be lowered.
If the automakers can sell below the target prices, consumers will be able to purchase next-generation cars at effectively the same price as their gasoline-powered equivalents. If the actual prices are above the recommended target, the subsidies will be two-thirds of the price differential.
Under the current purchase incentive system, buyers get subsidies for half the price differential between next-generation vehicles and gasoline cars.