At noon on July 31, 2026, an electric bus suddenly caught fire while driving near Nanko-naka Futo Station in the Suminoe Ward of Osaka, Japan. The front section of the roof was severely burned, and thick smoke billowed into the sky. The driver stopped the vehicle immediately after noticing something amiss, and smoke and flames subsequently erupted from the roof. The driver was the only person on board; there were no casualties.
This marks the first instance of an electric bus fire in Japan.
The vehicle involved was an Isuzu Erga EV, used as an employee shuttle for a subsidiary of the Osaka Gas Group. The cause of the fire is currently under investigation.
Japan's first electric bus fire! The vehicle involved was a domestic brand (Isuzu), but the battery was made in South Korea.
The vehicle involved was an Isuzu Erga EV.
1. The battery was made by South Korea's LG, not a Japanese brand.
The vehicle's core component-the battery-was supplied not by Japanese companies like Panasonic or Murata, but by South Korea's LG Energy Solution.
Completion of LG Energy Solution's second lithium-ion battery plant _ Green Smart Energy Technology Research Institute
LG Energy Solution battery plant
Isuzu and LG Energy Solution established a battery supply partnership in 2022, with LG primarily supplying ternary lithium batteries.
This is not the first time LG Energy Solution's ternary lithium batteries have been involved in incidents.
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Around 2021, LG Energy Solution's ternary lithium batteries were linked to a series of fire incidents. General Motors recalled 143,000 Chevrolet Bolt EVs as a result. Ultimately, LG paid approximately $1.9 billion in compensation.
Yet, despite this history, Isuzu still chose LG Energy Solution as its battery supplier.
Secured a massive order! LG Energy Solution to supply cylindrical batteries to Isuzu! _ Yiche
LG Energy Solution battery product image
2. A price hike occurred just three days before the accident; the cost was exorbitantly high.
There is also an awkward coincidence regarding this event.
Three days prior to the accident-on July 28-Isuzu had just announced updates to the Erga EV along with a price increase. The latest list price was raised from 65,781,980 yen to 66,495,000 yen.
What does a price of over 60 million yen actually represent? [Image]
Comparison Infographic: Isuzu Erga EV vs. BYD K8
The BYD K8 pure electric bus, which is rapidly gaining popularity in the Japanese market, has a pre-tax price of only around 38.5 million yen. That is approximately 28 million yen cheaper than the Erga EV.
That price difference is almost enough to buy another medium-sized bus.
III. Range and Battery Capacity Also Fall Short
Let's look at range and battery capacity.
Isuzu unveils the Erga EV bus as the world's first battery-electric...
The Erga EV has an official rated range of 360 km, but note-this figure was measured at a constant speed of 30 km/h. Feedback from multiple operators indicates that the range drops significantly during actual passenger service.
In terms of battery capacity, the Erga EV has 242 kWh.
Low-floor entry: Analysis of the 2018 BYD K8 pure electric bus highlights - EV Vision
The BYD K8 has a battery capacity of 314 kWh. That is a difference of 72 kWh-a significant gap.
Higher price, smaller battery, and inflated range figures-judging by these metrics, it is indeed difficult for the Isuzu Erga EV to compete with products from Chinese manufacturers.
IV. BYD Has Captured 70% of Japan's Electric Bus Market
This is no exaggeration.
BYD's market share in Japan's electric bus sector has surpassed 70%. With over 500 units ordered and a market share exceeding 50%, it firmly holds the top spot in the industry.
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What about domestic Japanese brands?
According to data from autonomous bus field tests in Japan for the 2025 fiscal year, vehicles from Chinese manufacturers held a combined market share of 50.3%, whereas Japanese automakers accounted for only 16.1% in total. Isuzu Motors ranked first among Japanese automakers with a 10.5% share, but this pales in comparison to BYD's 36.4% share.
Established Japanese automakers like Isuzu and Hino have clearly fallen behind in the wave of electrification.
V. Why Can't Domestic Japanese Brands Beat BYD?
The reasons are straightforward.
First, the price gap is massive. The BYD K8 sells for 38.5 million yen, a price comparable to that of a domestically produced Japanese diesel bus. The Isuzu Erga EV sells for over 66 million yen-nearly double the price of BYD's offerings. Bus companies naturally have to crunch the numbers when making purchasing decisions.
Second, the products are better suited to the market. BYD designed models like the J6 and J7 specifically for Japan, optimizing them to meet local road regulations (such as the 2.3-meter width limit). The J6, being agile and offering great value for money, has become one of their flagship models.
Third, there is a clear first-mover advantage. BYD began delivering its K8 model in Japan as early as 2021. While the traditional Japanese bus market is dominated by domestic manufacturers like Toyota, Mitsubishi Fuso, Isuzu, and Hino, BYD had already secured a strong foothold in the electric bus sector.
Fourth, the production scale of Japanese manufacturers is too small, putting them at an inherent disadvantage regarding cost competitiveness.
VI. Will this fire change anything?
This incident deals a significant blow to Isuzu.
On one hand, this is the first instance of an electric bus catching fire in Japan, so it is bound to attract a great deal of attention. On the other hand, the timing is incredibly awkward-the incident occurred just three days after Isuzu raised its prices.
The first electric bus fire in Japan! The vehicle involved was from the domestic brand Isuzu, but the battery was made in South Korea.
To make matters worse, the battery supplier, LG Energy Solution, has a history of issues. Who in the industry isn't aware of the $1.9 billion compensation payout involving General Motors?
For BYD, this could actually be an indirect benefit.
BYD's electric buses have been operating in Japan for years without any major spontaneous combustion incidents. The fact that the bus that caught fire was a domestic Japanese model using South Korean batteries actually highlights the reliability of BYD's products.
There has long been talk in the Japanese market about Chinese electric vehicles being unsafe. Yet, the reality is that it was a Japanese-made electric bus that caught fire first.
VII. The industry shake-up has only just begun.
The Japanese electric bus market is undergoing rapid change.
Japanese companies, hampered by small scale and high costs, have already been left behind by Chinese manufacturers like BYD in the electric bus sector.
Mitsubishi Fuso Truck and Bus Corporation has already begun collaborating with Hon Hai (Foxconn), planning to establish a joint venture in the second half of 2026 to focus on the electric bus business. This indicates that Japanese automakers are aware of the problem.
However, catching up won't be easy. BYD has been deeply cultivating the Japanese market for years, successfully establishing its products, distribution channels, and reputation. This fire incident involving an Isuzu vehicle may prompt more Japanese bus operators to re-evaluate their choice of suppliers. BYD-with its low prices, high battery capacity, and a track record of years of operation without major issues-will only become more attractive.
