Due to yen weakness and government subsidies, Japan has lowered the price of Tesla (TSLA.US) Model Y to below $23,000.

According to Jinse Finance APP, Tesla's (TSLA.US) best-selling electric vehicle model now has the world's lowest price in Tokyo. Due to the weakening yen and significant government and Tokyo metropolitan subsidies this year, the Model Y's on-the-road price can be brought down to below $23,000. This price is even lower than what a tourist might pay for a vintage Rolex Oyster Perpetual Datejust watch at a Tokyo boutique.

Tesla is leveraging advertising to heavily promote this subsidy, aiming to capture market share in Japan's car market, which is dominated by Toyota (TM.US) and Suzuki (SZKMY.US). In the first half of this year, the Model Y became the highest-volume imported vehicle in Japan, with this SUV produced by Tesla's Shanghai Gigafactory.

On the other hand, U.S. President Trump has been pushing for more American car exports to Japan. The United States and Japan are also focusing on a $550 billion investment plan established under an agreement reached last year. In exchange, the U.S. agreed to lower import tariffs on Japanese cars.

Tesla lists the Model Y's suggested retail price at 5.6 million yen on its Japanese website. However, Tokyo residents can combine government and city-level subsidies of up to about 2 million yen, making the actual purchase price as low as 3.6 million yen (approximately $22,889). After similar discounts, the Model 3 has a minimum price of just 3.3 million yen.

This price in Japan is even lower than in the highly competitive Chinese market—domestically, the starting price for the Model Y is about 263,500 yuan (approximately $39,344). In California, USA, even with a maximum subsidy of $3,500 for first-time electric vehicle buyers, this SUV's price is still over $36,000.