Competition over electric vehicles, or EVs, is intensifying. As the global market is expanding rapidly, both the public and private sectors should accelerate their efforts.
Honda Motor Co. has announced that it will begin selling the “Honda e” compact electric car in Japan in late October. This will be Honda’s first mass-production of an EV.
Other Japanese automakers are to follow. Nissan Motor Co., which has been in the lead with its Leaf model launched in 2010, will introduce the Ariya sport-utility vehicle next year. Toyota Motor Corp. plans to enter the market with a luxury car, while Mazda Motor Corp. will debut with an SUV type.
The global market for EVs in 2019 was 1.67 million units, accounting for 2% of new vehicle sales, but that represents a fivefold increase in four years. The figure is predicted to reach nearly 35% in 2035. It is reasonable for each company to make efforts in this field.
The problem is that sales of EVs are not growing domestically, despite automakers’ attempts to increase sales of EVs that do not emit carbon dioxide while running.
Four years ago, the government set a target of increasing new ownership of EVs and plug-in hybrid vehicles (PHVs) that can be recharged at home to 1 million annually. The present situation is estimated to be about one-third of that. Meanwhile, moves to promote the introduction of such vehicles are accelerating around the world.
In Europe, environmental regulations on automobiles have been tightened this year, and manufacturers will be fined if CO2 emissions exceed designated levels.
Germany and France have announced a policy to revitalize their economies, which have suffered from the novel coronavirus pandemic, with an emphasis on the environment. They are increasing subsidies for EV purchases and setting up charging stations.
China, the largest EV market, has been boosting sales by subsidizing “new energy vehicle” purchases.
It is desirable for Japan to come up with a policy to support EV sales, because they are more expensive than gasoline-powered vehicles. The government provides subsidies of up to ¥400,000, but this is far lower than European subsides of about ¥1 million maximum. The government should consider expanding the subsidy programs.
The continuous traveling distance per charge is shorter than gasoline-powered vehicles and it takes some time to charge the battery. Japan should also provide assistance to help overcome such technological issues.
Automobiles are a core Japanese industry, but this nation is lagging behind when it comes to EVs. In 2019, Tesla, Inc. topped global EV sales, followed by mostly Chinese companies from second place down.
The automobile industry has a broad base. Even if the dominance of gasoline-powered vehicles continues for the time being, employment will be negatively affected in the future unless the industry proceeds with such measures as structural changes among parts makers.
Next-generation vehicles include fuel cell vehicles (FCVs) that run on hydrogen, and the government has yet to decide which one to place importance on. The government must present a concrete strategy based on global trends.
— The original Japanese article appeared in The Yomiuri Shimbun on Aug. 31, 2020.