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The transportation sector is a major contributor to carbon dioxide emissions, and the resulting climate change. The diffusion of alternative fuel vehicles, including hybrid electric vehicles (HEV), is an important solution for these issues. This study aimed to evaluate the factors affecting the ownership ratio of HEVs, particularly passenger vehicles, and the regional differences in the purchase of HEVs in Japan. This study performed a fixed-effects regression analysis with panel data for 47 prefectures during the period 2005–2015 to evaluate the factors affecting the HEV ownership ratio and conducted three cluster analyses to investigate the regional differences in diffusion in terms of price categories, body types, and drive systems of HEVs. Some demographic and social factors were found to affect the ownership ratio in Japan, whereas economic factors, including prefecture-level subsidies for purchasing HEVs, were not. Regarding regional differences, prefectures in urban areas with higher income levels tend to purchase more expensive and large-sized HEVs. These results suggest that a strategy to sell the right vehicle to the right person and region is essential for further promoting HEVs in Japan. [ABSTRACT FROM AUTHOR]