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TOKYO — Chinese automaker BYD will develop an electric minicar for international markets including Europe, leveraging the technologies used for its mini EV newly debuted in Japan.
BYD in July launched the Racco, an electric vehicle developed for Japan’s kei minicar market, which has unique regulations. The company has decided to develop a separate mini EV using the proprietary battery pack, dubbed X-Pack, used for the first time in the Racco.
The new model is expected to hit the market in a few years.
In the X-Pack, electrical components such as inverters for voltage conversion are integrated into a single battery pack, which is mounted under the vehicle floor. Conventionally, major electrical components are under the hood at the front of a vehicle.
Japan requires kei minicars to be no more than 3.4 meters long, 1.48 meters wide or 2 meters high. Because EVs require batteries and electrical components, it was considered challenging to build an electric minicar that offers sufficient interior space and adequate crashworthiness.
The X-Pack let BYD overcome the space and safety challenges.
A prototype of the X-Pack. (BYD)
BYD will apply the technologies developed for Japan to its global offerings because intensifying competition in China makes overseas expansion critical. It wants to boost sales and quickly recover investments in electric minicars.
The international push comes as demand for small, affordable EVs grows worldwide, including in Europe. The European Union in 2025 announced a new vehicle category to promote electrics. Subsidies will be provided for compact EVs no longer than 4.2 meters that are manufactured within the bloc.
The Chinese automaker may plan to build compact EVs featuring the X-Pack in Europe to be eligible for such incentives, and to avoid tariffs. The company plans to open a plant in Hungary as early as this year.
BYD “can become a true top-selling automaker in five years,” Chairman and CEO Wang Chuanfu told a shareholders meeting in June. The remarks were taken to mean the company, ranked sixth in 2025 global sales, seeks to overtake industry leader Toyota Motor group.