Features
11 Nov 21

Sustainability: The Japanese Dilemma

There has been, for years now, a deep misalignment between the Japanese car industry and the Japanese government. As a member of the Paris agreement (amongst other environmental agreements), Japan has a promise to keep to the rest of the world, and regulates accordingly; a good example is the announced stop of ICE sales by 2035. The car industry however has its reservations and is speaking up louder than before.

Car industry

The Japanese OEMs are not disagreeing with the country’s sustainability objectives as such, but rather with the methodology and challenging timelines. They have stressed, frequently, that a forced transition to EVs is inconvenient, expensive and that it misses its objectives.

Nonetheless, the Japanese government – and the rest of the world for that matter – is not deviating from its course: the extinction of ICE.

Toyota vs. The Rest

Let’s zoom in on Akio Toyoda, not only president of Toyota, but also heading the Japanese automotive lobby group. Toyoda has been heard saying that “…in carbon neutrality, our enemy is carbon -- not the internal combustion engine.”

It is a well-known fact that Toyota has strategically chosen for hybrid and hydrogen, rather than promoting a transition to EV. Initially, most Japanese carmakers followed the market leader, but gradually, cracks in the alliance began to show. We’re seeing more and more Japanese OEM committing to electrification or, at least, increasing the number of EVs in their lineup.

Who’s right?

Long story short, Toyoda-san is not wrong. Japan sources its energy from oil (38.4%), coal (27.8%), gas (22.2%) and a bit of nuclear (4%). As a result of this, and including the manufacturing process, transport and disposal, battery electric vehicles “produce” currently 42% more emissions than hybrid vehicles.  In addition, he makes a fair point when stating that electrification will ultimately make people less mobile, due to the cost of a BEV compared to the cost of an ICE.

Nonetheless, as the rest of the world is now committing to EVs, “being right” has no commercial value. Toyota is at risk of loosing market share to the old supply chain (Ford, VW…), the new supply chain (Tesla…) and a bunch of alternative mobility solutions that are predicted to gain market share over the next years.  
 

In the meanwhile…

Japan is committing to becoming carbon-neutral by 2050 – a pledge that everyone is questioning how this can be implemented and if Akio Toyoda is correct, the transition to EVs is a wrong bet. It is clear that Japan will have to widen the perspective of its measures and integrate a full energy transition, rather than focusing on the car industry.

Picture Credit: Shutterstock

Authored by: Yves Helven