Toyota Motor Corp unveiled its first mass-produced electric vehicle in Japan on Thursday, lease-only, a strategy the automaker said would help ease driver concerns about battery life and resale value but raised concerns Analysts’ attention.

Gasoline-electric hybrids remain more popular in Toyota’s home market than electric vehicles (EVs), which accounted for just 1 per cent of passenger cars sold in Japan last year, industry figures show. Still, the market is growing rapidly, and foreign automakers, including Tesla, are making visible progress in cities like Tokyo.

Bundling insurance, repair costs and a battery warranty into the deal, Toyota will lease the bZ4X sport-utility vehicle (SUV) for $39,000 for the first four years. Cancellation within the first 48 months will mean additional charges. CLSA analyst Christopher Richter said that while Japan’s adoption of electric vehicles has been slow, that will change, and Toyota could lose market share by focusing on a leasing model rather than a buying model.

Toyota said in December it would spend 8 trillion yen ($62 billion) to electrify vehicles by 2030. Toyota aims to lease 5,000 SUVs this fiscal year, roughly the same number of EVs that analysts estimate Tesla sold in Japan last year.
The automaker plans to sell the bZ4X in other markets later this year, and pre-orders have already started in some European countries. A spokesman said that Toyota has not yet decided when it will start selling the cars in Japan.

Industry figures show that imports of electric EVs will nearly triple to a record 8,610 by 2021. Analysts estimate that about 60 per cent of that is Tesla. Still, Japanese automakers are cautious about moving to an all-electric lane.

Toyota pioneered hybrid vehicles more than 20 years ago and has maintained its ambitions for hybrid and hydrogen vehicles, even as it is investing more to boost its battery-electric vehicle lineup. On Thursday, rival Nissan Motor Co, which pioneered the Leaf’s mass-market electric car in 2010, will unveil its second battery-electric model, the Ariya SUV. Ariya sells for the equivalent of $41,500, not including government subsidies. In April, Honda Motor Co. set a goal of launching 30 electric vehicles globally by 2030.