The $40 Million Disposable Train: The Weird Economics of the Shinkansen

The $40 Million Disposable Train: The Weird Economics of the Shinkansen

Imagine building a $40 million bullet train and 
scrapping it in its prime. In Japan, cuttingedge Shinkansen bullet trains engineering marvels 
of speed and comfort are often retired after just 13 to 15 years of service. That’s about as 
long as a family car might last. Stunningly short for a train that cost as much as a jumbo jet. 
Meanwhile, across the world, high-speed trains in Europe or the US routinely run 30, 40, even 
50 years with midlife overhauls. It sounds like a terrible waste. Practically new Japanese trains 
built to perfection, chopped for scrap while still in top working order. Why would anyone throw away 
such expensive machines so soon? But this isn’t a mistake or a fluke. It’s by design. Japan’s 
highspeed rail system operates on an entirely different economic logic that flips conventional 
thinking on its head. Today, we’re unpacking the weird economics of Shinkansen rolling stock, a 
system that treats $40 million trains almost like disposable tech gadgets replaced in the relentless 
pursuit of efficiency and perfection. First, some context. The Shinkansen is Japan’s famed 
high-speed rail network spanning the country with trains running up to 320 km per hour. Since 
1964, these bullet trains have become a symbol of Japan’s technology and punctuality. Today, 
several regional rail companies like JR Central, JR East, JR West operate different Shinkansen 
lines. Each 16 car train set can cost on the order of 5 billion yen, about4 to $50 million. 
For example, Central Japan Railway recently ordered 19 new N700S series Shinkansen for 
114 billion yen, approximately $900 million, roughly $47 million per train. These are serious 
investments comparable to a brand new Boeing jet. Yet unlike airplanes often used for decades, 
Japan’s practice has been to write off and replace Shinkansen train sets after only approximately 15 
years of operation. To put that in perspective, the very first French TGV train from 
1981 ran 40 years before retirement, and Germany is refurbishing its original ice 
trains to keep them going well into their 40s. In contrast, Japan’s high-speed trains are 
fully depreciated in just 13 years by law, and many are taken out of frontline service 
around the 15-year mark, sometimes even earlier. Why does this matter? Because replacing trains so 
often is hugely expensive and seemingly wasteful. We’re talking about discarding high-tech trains 
that are mechanically capable of running for decades longer. The stakes are high for the rail 
company’s finances, for passengers who ultimately bear costs, and even for technology innovation. 
Understanding this practice means understanding how Japan’s rail industry prioritizes absolute 
reliability, standardization, and efficiency over the longhaul frugality that others take for 
granted. Let’s dive into how this system works. Japan’s Shinkansen lines are run like clockwork 
and one key to that is the one model strategy. On the flagship Tokaido Shinkansen Tokyo Asaka 
for instance, every train in service is the same model at any given time. Today it’s the N700S. A 
decade ago it was the N700A. Before that the 700 series and so on. JR Central which operates 
this line has a policy of fleet uniformity. They phase out older models entirely as new ones 
come in. This means no mixed fleets of different ages or performance on the line. All trains 
have identical acceleration, braking, and speed, which makes scheduling simpler and more efficient. 
With identical trains, they can depart every 3 minutes at peak, up to 17 trains per hour, without 
causing delays. A slower older train never has to be overtaken by a faster new one because there are 
no slower older ones in service. Uniform fleets also simplify maintenance and training. Crews 
become absolute experts on that one model. Spare parts inventory is streamlined. The railway isn’t 
juggling components for three or four different train types from different eras. It’s very much 
like Southwest Airlines one aircraft policy, only 737s, or a city bus fleet where every bus is 
the same model. Economies of scale kick in. Japan takes this further by planning frequent model 
renewals. Each generation of Shinkansen train is designed with a relatively short service 
life in mind. That sounds negative, but it’s quite intentional. They employ a value engineering 
philosophy where trains are lighter and somewhat less overbuilt than Western counterparts, making 
them cheaper to produce, more energyefficient, and easier to maintain, but with the trade-off of 
a shorter lifespan. In essence, Japan optimizes trains for 15 to 20 years of use instead of 30 to 
40. How is a shorter lifespan engineered? For one, lightweight construction. Japanese bullet trains 
use a lot of high-grade aluminum and innovations to shave weight. A lighter train experiences 
less track wear and lower energy costs, but the materials like thinner gauge metals 
may fatigue sooner under stress. Fun fact, a Shinkansen N700 coach weighs dramatically less 
per seat than say a German ICE or American Asella. One analysis notes that per passenger seat, an 
N700 is about 0.5 tons, an ICE 3 about 1.0 ton, and an Amtrak Asella a hefty 2.0 tons. That’s 
right, four times heavier per seat in the Asella, largely due to extra reinforcement for crash 
safety in the US. The Shinkansen’s lighter build is possible because of a controlled environment. 
More on safety later, but it also means the trains aren’t overbuilt like tanks. Japanese engineers 
accept that after maybe 15 years of running 500,000 plus km per year at high speed, it’s 
optimal to replace the train rather than extend its life via expensive rebuilds. They designed the 
trains to be modular and recyclable as well. Many components can be swapped in and out during that 
15-year life with minimal downtime. And when a train is retired, materials like aluminum are 99% 
recycled into the next generation. In fact, the newest N700S series incorporates recycled aluminum 
from older Shinkansen in its construction. This closed loop approach softens the environmental 
impact of throwing away trains and it’s part of the industrial logic. Instead of doing one big 
life extension overhaul at 20 years, as European operators do, Japan continuously trickles new 
trains into service and old ones out. It keeps average fleet age low and tech level high. For 
example, in the 2010s, JR Central undertook a mass fleet renewal. The 700 series trains built 1999 to 
2006 were all out of Tokaido Shinkansen service by 2020, replaced by newer N700A and N700S trains. 
The oldest 700s lasted about 20 years, some newer ones barely 14 years before retirement. They 
had zero major mechanical failures in service. They weren’t waiting for them to break. They were 
proactively replaced. Similarly, the earlier 300 series 1992 debut were completely retired by 2012, 
exactly 20 years after introduction. JR East’s double-decker E4 series ran approximately 23 years 
before retirement in 2021. These timelines are way shorter than what we see in Europe’s high-speed 
fleets, and that’s by deliberate design. Build them excellent, run them hard for a decade 
or two, replace, repeat. So far, we’ve looked at engineering and operational philosophy. Now, 
here’s the plot twist. It’s not just engineering driving this. It’s accounting. In Japan, tax laws 
and railway accounting practices historically set a short useful life for rolling stock, typically 
13 years for electric trains. This is critically important. It means a rail company can fully 
depreciate a train set in just 13 years for tax and bookkeeping purposes. Depreciation is 
essentially spreading out the cost of an asset over its useful life. In many countries, a train 
might be depreciated over say 30 years. But in Japan, for decades, the legal useful life was 13 
years for train vehicles. This was the standard set by authorities. After that, on the books, 
the train’s value is considered almost zero. What does this mean in practice? By the time a 
Shinkansen hits its 13th birthday, the company has already expensed its full cost. Any further 
use is gravy. The train is essentially running for free from an accounting perspective. However, 
and here’s the key, any major refurbishments or overhauls after that point cannot be depreciated 
in the same advantageous way. They just count as expenses. There’s a strong financial incentive to 
replace the train with a new one around that time. starting a fresh depreciation cycle rather than 
invest big money into extending an old asset that’s off the books. It’s a bit like how some 
businesses lease cars and swap them frequently to always have a write off rather than maintaining 
an old car. Japan’s railways have embraced this. JR companies plan capital investment cycles such 
that new trains arrive as old ones hit the end of their depreciable life. In fact, one company JRQU 
recently revised its accounting to lengthen train depreciation to 20 years, explicitly noting that 
13-year legal life was shorter than the economic life of approximately 20 years. But the big 
players like JR Central and JR East traditionally stuck close to that approximately 15-year window 
in practice. It’s a strategic financial move. Keeping a young fleet also means consistently 
high depreciation charges which reduce taxable profit a tax shield while the trains are new 
and then by the time maintenance costs would surge in old age they’ve already been replaced. 
This depreciationdriven approach essentially aligns with the operational logic. Around 10 to 15 
years a train may need a costly midlife overhaul, new motors, brakes, interior refit to keep 
going another 15 years. In Europe, they do it and amatize over the extended life. In Japan, 
they crunch the numbers and often find it cheaper or more effective to invest in brand new trains 
with better technology, using the tax depreciation as a cushion. The result is almost a planned 
obsolescence model. Not in the shoddy sense, but in a financially optimized sense. The railways 
essentially say, “We’ve gotten our money’s worth out of this train in 13 years on paper. Time to 
buy the next generation.” This turning point, the 13-year mark, is where business strategy 
meets engineering. And it’s a big reason Japan can justify discarding trains that still 
seem perfectly good. From the company’s view, those trains are fully paid off, and any further 
operation is a risk of rising maintenance without depreciation benefits. So, they pull the trigger 
on new purchases. So, what happens to all these old trains when new models roll in? Japan doesn’t 
literally throw them in the trash at year 13. There’s a cascade model at work. Typically, when 
a new Shinkansen series is introduced, the fresh trains take over the premier services. The fastest 
runs with fewest stops like the Nomi trains on Tokaido. The displaced slightly older trains then 
cascade down to slower services. For example, after 2007 when the N700 series arrived, the older 
700 series were reassigned from top speed Nomi runs to all stop Kadama services. They operated 
at lower intensity making room for the N700’s to shine. The even older generation 300 series at 
that time got fully retired as soon as enough N700’s were in service. In this way, each new 
train generation pushes the previous one down a rung until it exits. This cascade maximizes useful 
life in a secondary role without compromising the headline service. A train doing Kadama stops 
at every station and runs shorter distances each day. So an aging 15-year-old set can handle 
that a bit longer while the young thoroughbreads handle the grueling Tokyo Asaka sprints hourly. 
For instance, as N700 trains took over in 2007, 700 series trains completely replaced the 300 
series on Kadama by 2012. The 300’s were done. The first 700 series withdrawals began around 
2011. The last 700 ran in 2020. So the 700’s got about 3 to five extra years in the slower lane 
before their farewell. It’s an elegant phase out. Always maintain top performance at the top tier 
and bleed the last miles out of older trains at the bottom tier. Now what are the consequences of 
this aggressive renewal strategy? Let’s break them down. Nearperfect reliability with a young fleet. 
Breakdowns are exceedingly rare. The Shinkansen’s famed uptime stats are no joke. In 2019, the 
average delay per train on the Tokaido Shinkansen was 12 seconds. Yes, seconds. For 130,000 trains 
a year, virtually everyone is on time. Part of that is rigorous maintenance and operational 
excellence, but having trains mostly under 15 years old helps a lot. Components haven’t aged 
to the failureprone stage. In western railroads, as trains push 30 plus years, you see more 
incidents, mechanical failures, door problems, etc. Japan avoids that age related risk almost 
entirely. A senior JR Central manager once noted, they run on such tight headways that an older 
train with slower acceleration or a chance of hiccup punctuality problems, so they simply 
don’t keep them around to become a problem. It’s preventative. retire it before it causes a delay 
or a headline. High costs and tax optimization. Replacing trains often is capital intensive, 
but Japanese operators make it work financially. Thanks to the depreciation practices we discussed, 
they optimize taxes and profits such that constant reinvestment is baked into the business model. 
Essentially, customers are always riding fairly new equipment and the companies are always paying 
for new equipment. Ticket prices on Shinkansen routes are not cheap. Tokyo Osaka on a Nomi is 
about 14,000 yen or about $120 one way. Riders pay a premium and they indeed get a premium product. A 
modern train with the latest tech, very low chance of disruption and plush updated interiors. From a 
total cost of ownership perspective, the railways argue this is efficient. They never face the 
ballooning maintenance costs that plague older rolling stock. For example, instead of doing a 
massive midlife overhaul costing many millions on a 15-year-old train, that money goes into buying 
a brand new one with better energy efficiency. They’re basically trading maintenance expense for 
capital expense, aided by tax depreciation. It’s a form of tax optimization and asset management 
that while unusual has been sustainable given Japan’s high passenger volumes. Remember the 
Tokaido Shinkansen alone carries over 170 million passengers a year in pre20 times. High revenue 
routes can fund frequent train renewal. Continuous technological upgrades. Another consequence is 
the fast pace of innovation. Each new train model introduces improvements, quieter rides, energy 
savings, safety upgrades. By cycling new models every decade or so, Japan has leaped through 
multiple generations quickly. For instance, compare a 1980s 0 series Shinkansen to a 2007 
N700. The latter is unrecognizably advanced tilting capabilities, precision braking, etc. Now, 
the 2020 N700S brings even more like lithium ion battery self-propulsion for emergencies. Japanese 
rail companies and manufacturers, Hitachi, Kawasaki, etc., benefit from this churn as a kind 
of R&D driver. They’re constantly designing the next model, keeping domestic train building 
expertise at the cutting edge. In countries where trains are replaced every 30 to 40 years, 
manufacturers have dry spells and tech jumps are bigger but slower. In Japan, the feedback loop 
from operation to new design is continuous. It’s arguably made Shinkansen trains some of the 
most advanced in the world, precisely because they don’t sit around for 40 years. Resource and 
environmental impact. We should note the obvious downside, waste and resource use. Building a 16 
car high-speed train consumes a lot of materials and energy. Scrapping one after 15 to 20 years 
means you’ve shortened the use of those materials compared to 30 to 40 years elsewhere. However, 
Japan mitigates this by very high recycling rates. As mentioned, aluminum, steel, copper from 
retired Shinkansen are almost entirely recycled. The newest trains literally carry the DNA of their 
predecessors. Environmental assessments by JR Central suggest that using recycled aluminum cuts 
CO2 emissions by 97% compared to new aluminum for those parts. So, while the cycle is faster, it’s 
not as wasteful as it sounds. It’s more closed loop. Still, it’s a unique approach that only 
a few systems with Japan’s scale and ridership could arguably justify. If everyone did this, the 
global demand for new trains and disposing of old ones would skyrocket. Japan’s case is somewhat 
singular. We’ve been painting a picture of Japan scrapping perfectly good trains. So why not sell 
them to another country to use? The short answer, compatibility and standards. Shinkansen trains are 
designed exclusively for Japan’s system and that system is quite unique. Here are the key barriers. 
crash safety philosophy. Perhaps the biggest showstopper is that Japanese high-speed trains do 
not meet international crashworthiness standards as is. This is not because they’re unsafe. It’s 
because Japan chose a different safety philosophy. The Shinkansen system relies on crash avoidance, 
dedicated tracks with no level crossings, no mixed freight traffic, and advanced automatic train 
control. In over 55 years, no Shinkansen has ever had a collision or derailment causing passenger 
deaths. An incredible record. Because they avoid crashes altogether, the trains themselves can 
be built lighter without heavy crash noses or reinforced frames that European trains which 
might share tracks or encounter obstacles have to include. In Europe and the US regulations, 
UIC standards in Europe, FRA regulations in the US historically required trains to withstand 
certain crash forces. A Japanese Shinkansen carbide optimized to be lightly wouldn’t pass a 
head-on collision test against, say, a freight locomotive. An expert on a rail forum summarized 
that Japan’s policy is to prevent collisions rather than survive them. Whereas European trains 
are built assuming a crash could happen and must be survivable. The result used Shinkansen trains 
would not legally qualify for use on European rail networks without extensive and impractical 
modification. In the US until recently, regulations were even tougher, mandating extremely 
heavy structures for any train sharing tracks with freight. Note, there are newer rules allowing 
lighter tier 3 train sets on dedicated high-speed corridors, but even then, an imported design has 
to go through complex approvals. Essentially, Japan’s retired trains are like finely tuned 
race cars that can’t be driven on normal roads due to different safety rules. Loading gauge size. 
Shinkansen trains have a different loading gauge. That’s the width and height envelope in which 
they fit. Japanese tunnels and platforms for Shinkansen were built new in the 1960s and were 
quite generous in dimensions. A Shinkansen car is about 3.38 m wide and taller than many European 
high-speed trains. European high-speed lines, while also built new, sometimes connect to older 
infrastructure or stations that impose tighter clearances. For example, the Channel Tunnel and UK 
highspeed lines have a certain loading gauge that is narrower than Shinkansen stock. A Japanese 
train might literally be too wide or tall to clear certain structures or align with platforms 
elsewhere. And if you think, well, maybe other Asian countries, even there, differences bite. 
China’s early high-speed system was influenced by Shinkansen tech, the E2 series, but they built 
their own wider body versions locally. Countries like Taiwan did import Shinkansen derived 
trains, the 700T, but those were customuilt new by Japanese manufacturers to fit Taiwan’s 
specifications, including different signaling systems and safety features. A secondhand Japanese 
unit would face all sorts of interface issues. Does it fit the local power supply voltage and 
frequency, the signaling and train control? Are the doors at the right height for platforms? It’s 
not like buying a used car. It’s more like trying to reuse a lefthand drive bus in a country 
with right-hand drive. Technically possible, but not without major modification. Track gauge 
and infrastructure. The Shinkansen standard gauge is 1,435 mm. Actually the same as Europe’s. So 
gauge width isn’t a problem unlike the rest of Japan’s conventional trains which are narrow 
gauge 1,67 mm and sometimes sold secondhand to other Asian countries. However, beyond gauge, the 
track geometry and design might differ. Shinkansen have very gentle curves and flat grades compared 
to older lines. Their bogeies and suspension are optimized for that environment. If you plopped 
a Shinkansen train onto say an older European high-speed route with different curve super 
elevations, it might not perform as well or could even have issues with wheel rail interface. The 
signal systems are also different. Shinkansen use a dedicated ATC system. All these systems would 
need expensive retrofitting. Essentially, a used Shinkansson train is highly specialized hardware 
that doesn’t plug and play elsewhere. One rail fan on a forum lamented, “It seems like scrapping 
a 15-year-old Toyota in perfect condition. Except imagine that Toyota had the steering wheel on 
the other side, ran on a different kind of fuel, and only fit roads in its home country. That’s 
essentially the case here. The Shinkansen are thoroughbreds, unmatched on their home turf, but 
ills suited to anywhere else. Thus, Japan’s rail companies don’t bank on any resale value. They 
factor in upfront that after approximately 15 years, the train’s value is zero financially 
and practically. And so, the cycle continues.

A single Shinkansen trainset costs roughly $40 million USD. In Europe, a train like this would run for 30 or 40 years. In Japan, they are often retired and scrapped after just 13 years. This video is a deep dive into the counter-intuitive economics of the Shinkansen fleet. It explains why Japan builds the world’s most advanced trains only to throw them away, and how standardization and depreciation drive a ruthless industrial machine.

Footage: Shutterstock

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