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U.S. goal of 50% electric vehicles to pose challenges for Japan’s automakers

The Biden administration has announced that 50% of new cars sold in the U.S. will be electric vehicles (EVs) and other electricity-powered vehicles by 2030. This level is “higher than expected,” said a source at a Japanese automaker, who was apparently caught by surprise. Since large gasoline-powered vehicles with high profit margins tend to sell well in the United States, the U.S. market has been lucrative for Japanese automakers. The U.S. administration’s move may deal a blow to the Japanese economy and force the automakers to revise and shift their business strategies toward electric-powered vehicles.


In May, Toyota Motors announced that 15% of new Toyota vehicles sold in the U.S. will be EVs and fuel cell vehicles (FCVs) by 2030. Honda Motors has set its target at 40%. “We will adjust our strategy as needed to meet the new rules,” said a source at Honda. Particularly in Europe. the move toward decarbonization has picked up speed.  A senior official at a major automaker said that the industry must keep a close eye on developments in each country.


Developing EVs is costly. But some in the auto industry expect that without a significant breakthrough in battery technology, achieving the goal set by the U.S. administration will be difficult. Since U.S. customers expect to drive long distances, Toyota and Nissan are developing all-solid-state batteries that increase battery capacity and enable vehicles to cover more distance per charge. 

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