By Yamauchi Ryosuke
On Aug. 5, U.S. President Biden signed an executive order setting a goal for 50% of new cars sold in 2030 to be “zero emission vehicles” that do not release exhaust gases, such as electric vehicles (EVs). There are views among Japanese automakers that it will be easier to take measures to meet the U.S. goal than that of the European Union (EU). This is because the U.S. considers plug-in hybrid vehicles (PHVs), which Japan excels at, to be a zero-emission vehicle.
President Biden gave a speech at the White House in front of top executives from General Motors (GM) and Ford. President Biden said that the “future of car manufacturing is “electric and there’s no turning back. The question is whether we’ll lead or fall behind in the race for the future.” The goal has no legal force, but Japanese automakers are expected to take appropriate measures.
Toyota Motor Corp. said in an statement dated Aug. 5 that the U.S. goal was “ambitious.” The statement said that the goal was “very good for the environment” and that Toyota will “fulfill [its] role [in achieving the goal].”
Although hybrid vehicles (HVs), which are one of Toyota’s strengths, are not included in the list of zero-emission vehicles, Toyota already sells the PHV versions of the Prius and the RAV4 sports utility vehicle (SUV). Automakers can continue to sell PHVs in the U.S., unlike in the EU and U.K., which plan to phase out the sale of PHVs.
A top Toyota executive says that “there are many steps we can take if PHVs are included [in the list of zero-emission vehicles].”
An insider at Mitsubishi Motors, another automaker that places emphasis on PHVs, welcomed their inclusion, saying that the U.S. goal “will be an advantage [for the company].”
Honda released a joint statement with four U.S. and European companies including Volkswagen saying that they “support the Administration’s goal of reaching an electric vehicle future and applaud President Biden’s leadership on reducing emissions.” Honda’s goal is to have 40% of its new cars be EVs or fuel-cell vehicles (FCVs) by 2030.
Nissan announced that “over 40% of its new cars sold in the U.S. will be EVs by 2030.”
It seems that there are domestic factors that resulted the U.S. goal to be more “pragmatic” compared with the EU. Cars popular in the U.S., which covers vast territory, are full-sized gasoline vehicles suited to long distance driving, such as pick-up trucks. Even with the new goal, half of new cars sold in 2030 may be gasoline vehicles. It seems that the new goal allows the sale of PHVs with gasoline engines since at the moment EVs are not suited for driving long distances.
The U.S., whose new car sales rank second globally after China, is a more important market for Japan than the EU. According to the research firm MarkLines, Japanese cars comprise about a 40% share of the 8.3 million new cars sold in the U.S. between January and June 2021.
Securing batteries for PHVs and EVs will be essential for maintaining Japan’s share of the U.S. market. Nickel, cobalt and other rare metals used for electrodes are in short supply due to increased demand, and prices remain high. There is a growing global battle over batteries.
Toyota announced that this fiscal year it will invest 160 billion yen in battery-related items. Its battery subsidiary, a joint venture with Panasonic, will reinforce its production lines in Japan and China. Nissan revealed a plan to build a new factory in Japan and the U.K. in cooperation with a Chinese firm it invests in. Honda invested in Contemporary Amperex Technology Co. (CATL), China’s largest battery maker for cars. It is possible that actions to secure batteries will accelerate further.
