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Japan Tries Cars That Make the Mini Look Maxi

Entrepreneurs bet ultracompacts will lure the nation’s older drivers
The ZEVe ultracompact
The ZEVe ultracompactPhotograph by Town EV/Bloomberg

Japan, always huge in the business of making compact cars, is thinking even smaller. The so-called ultracompact—picture a street-legal golf cart—this month is set to become Japan’s first new vehicle niche to win government approval in 50 years. That’s drawn the attention of both established automakers and a new generation of startups eager to provide low-powered transportation for Japan’s aging population. “This is a once-in-a-lifetime chance,” says Yoshiro Sugimoto, 62, a Toyota Motor veteran who’s pooled 20 million yen ($254,800) of his and colleagues’ cash in a quest to build Japan’s smallest cars.

Town EV, Sugimoto’s startup, plans to have its 800,000-yen ($10,000) ZEVe ultracompact on the market in Japan next year. The aluminum-framed one-seater prototype is a narrow cart with a windshield, canopy, hatchback-style trunk, and no side windows or doors. It’s designed to travel as far as 50 kilometers (31 miles) when fully charged at a top speed of 50 km per hour. Sugimoto, whose Toyota career included years as an assistant to then-President Shoichiro Toyoda, says sales of the ZEVe should reach 1,000 by 2015, and prices may dip to as low as 600,000 yen per vehicle. To hold down costs, Town EV will build the car at fabrication shops run by subcontractors until sales reach a scale to warrant a full assembly line. It has no plans to introduce the cars in the U.S.