Vital industry must be protected amid transition to electric vehicles

As part of efforts to achieve decarbonization, automakers are strengthening their sales strategies for electric vehicles. The public and private sectors must work together to enhance their technological capabilities, in order to protect one of Japan’s core industries.

Toyota Motor Corp. has announced its goal of increasing its global EV sales to 3.5 million units in 2030. This is up from the previous target of 2 million, including sales of fuel cell vehicles. The company intends to launch 30 new models by 2030.

Toyota has said it plans to convert all models of its Lexus luxury brand to EVs by 2035. The automaker also unveiled a plan to invest ¥4 trillion in research and development, as well as capital investment, for EVs.

Toyota has been strong in the field of hybrid vehicles, which run concurrently on both an internal combustion engine and an electric motor, and the company had been seen as “negative” about promoting the spread of EVs.

Toyota has received low marks from environmental organizations for its measures to combat climate change, and it may be aiming to shed that reputation with the announcement of its new policy.

Honda Motor Co. plans to market all of its vehicles as EVs or FCVs by 2040. Nissan Motor Co. will invest ¥2 trillion in EVs and plans to launch 15 models by fiscal 2030. It is hoped the strengthening of each company’s strategy will add momentum to the spread of EVs.

The shift to EVs is a global trend. The European Union will ban the sale of new gasoline-powered vehicles, including HVs, in 2035. China, the world’s largest market, has also set a policy to make EVs the mainstay of new vehicle sales by 2035.

In a ranking of the number of EVs sold worldwide in 2020, Tesla Inc. of the United States ranked first, followed by a Chinese manufacturer. Japanese manufacturers are lagging behind, with their top finish being the alliance of Nissan, Mitsubishi Motors Corp. and France’s Renault SA in fourth place. Toyota and Honda remained below 20th.

Automobile manufacturing is one of Japan’s core industries, and if Japan loses its international competitiveness by falling behind in the transition to EVs, it will be a huge blow to the entire economy. There is an urgent need to catch up and accelerate Japan’s momentum.

Current EVs have many aspects that need to be improved, such as their high prices and short travel distances on a single charge.

In addition to reduced costs, the development of next-generation batteries with dramatically improved performance is expected to determine competitiveness. The government should effectively support research and development through subsidies and other measures.

Compared to gasoline-powered vehicles, which have complicated structures and require about 30,000 parts, EVs require only 10,000 to 20,000 parts. There are concerns about the impact on the employment of subcontractors, such as engine parts makers. The government and major auto manufacturers must not forget to support the structural reform of parts companies.

On the other hand, demand for HVs is expected to remain strong for the time being in emerging countries, where recharging infrastructure is difficult to develop. A flexible strategy that meets the needs of each region of the world will also be necessary.

— The original Japanese article appeared in The Yomiuri Shimbun on Dec. 31, 2021.