TOKYO -- Japan's electric vehicle purchase subsidies are caught in a tug-of-war, as the country's version of the U.S. Department of Government Efficiency (DOGE) eyes deep cuts while the industry ministry leading the program hopes to keep it afloat to help meet carbon emissions goals.

Japan's subsidies for electric and fuel cell vehicles offer support based on manufacturer and vehicle performance. EVs are eligible for subsidies of up to 1.3 million yen ($8,240) per vehicle.

Prime Minister Sanae Takaichi's government is focused on trimming subsidies as it looks to fund measures like growth investments and a consumption tax cut on food products. These efforts are widely referred to as the Japanese version of the Trump administration's DOGE.

"EV subsidies are a prime target for DOGE," a senior Finance Ministry official said. "Not only cuts but eliminating them outright is possible." Sales of EVs made by U.S. automaker Tesla and China's BYD have been rising in Japan. In public comments submitted regarding the Japanese DOGE initiative, some people said that, for the sake of Japan's automobile industry -- a core domestic sector -- priority should be given to domestic vehicles.

One factor behind Tokyo's generous support for EVs involves last year's tariff negotiations with the U.S., during which Japan's favorable treatment of fuel cell vehicles -- an area where Japanese companies are particularly strong -- came under criticism.

At an Oct. 9 ministerial meeting on the Japanese DOGE initiative, the government confirmed plans to pursue sweeping reviews of the budget and tax system by year-end. The government will "shift up a gear and pursue it thoroughly," said Finance Minister Satsuki Katayama, who oversees the initiative.

But the Ministry of Economy, Trade and Industry, which administers the subsidy program and sees efforts to promote EV adoption as unfinished, is wary of potential cuts. It seeks 110 billion yen to extend the program in its fiscal 2027 budget request.

On Oct. 21, the ministry said subsidy amounts would be reduced to 60%-80% of current levels beginning in January.

The maximum EV subsidy will fall from 1.3 million yen to 780,000 yen. The ministry said the roughly 110 billion yen it secured in fiscal 2025's supplementary budget for the subsidies was nearing depletion and that the reduction was necessary to keep it going.

An industry ministry official said the changes were not intended to signal the design of whatever program may emerge from fiscal 2027 budget negotiations. But "the new subsidy levels could serve as a benchmark for the upcoming budget talks," the official said.

"The basic assumption is that the subsidies will gradually decline as adoption progresses," Ryosei Akazawa, the trade and industry minister, said at a press conference Friday.

The industry ministry looks to be trying to get ahead of the issue by proposing spending reductions and thereby blunting a DOGE push for deeper cuts.

Electric vehicle adoption is indispensable to achieving Japan's goal of net-zero greenhouse gas emissions by 2050, the ministry says. The government aims to have electrified vehicles, including hybrids, account for 100% of new-vehicle sales by 2035. But EVs represented only about 5% of Japan's new-vehicle sales in September.

"We are still in the phase of creating domestic demand, and scaling back the program now would be premature," a senior industry ministry official said. A senior Finance Ministry official took a more critical stance.

"How long are we going to keep these subsidies?" the official said. "At the very least, we need an exit strategy." Japan's Next Generation Vehicle Promotion Center reports that subsidies have been used in the purchase of 710,000 vehicles since fiscal 2009. Though the program has promoted adoption, some industry executives say subsidies topping 1 million yen per vehicle distort the market.