It’s rare for a CEO of Toyota or a large Japanese company to criticize government plans directly in public. So it was striking when Toyota boss Akio Toyoda issued a warning Japan’s green energy plan before it was even unveiled at the end of last month.
“There is a risk that the business model of the auto industry will collapse,” Toyoda said, warning against the government’s plan for a rapid transition to electric vehicles without drastic change in its energy mix.
Speaking as the head of the powerful Japan Association of Automobile Manufacturers, Toyoda presented a carefully prepared set of estimates to underpin his criticism of Prime Minister Yoshihide Suga’s pillar policies. Carbon neutral targets for 2050.
Among the calculations detailed by Mr. Toyoda, one prediction emerged: If all cars in Japan today were electric vehicles, an additional 10 nuclear power plants or 20 coal-fired power plants would be needed to avoid an electricity shortage during the summer period of point.
Mr. Toyoda is certainly not the first questioning the green credentials of electric vehicles, especially in a country like Japan where heavy reliance on fossil fuels means electricity is primarily produced by burning coal. Toyota has also consistently argued that a longer-term solution to global warming should be a mix of hybrids, EVs and hydrogen vehicles.
But the fact that a company as influential as Toyota and one of the early advocates of green technology felt the need to speak out, underscores deeper tension within Japan Inc over the country’s energy challenges.
With its decision to end the sale of new gas-only vehicles by the mid-2030s, Japan is on the cusp of a green energy transition that will determine whether companies from Toyota to robot maker Fanuc , remain major global players. If the switch to renewables is successful, it could also herald a new wave of technological innovation that could lead to the reinventtroubled conglomerates such as Mitsubishi Heavy Industries and Toshiba.
But the consequences of failure would be greater than when the country’s consumer electronics giants lost their crowns to Apple and Samsung Electronics in the age of smartphones. With nearly all of the major economies in the EU, UK and China pledging to meet similar zero emission targets, competition for green technologies and investments is already intense.
As the carbon footprint becomes a benchmark of quality, products made in Japan may be less acceptable to environmentally conscious consumers, unless the world’s fifth largest emitter of greenhouse gases acts quickly to reduce its emissions. dependence on fossil fuels.
What motivated Mr. Toyoda to speak out – and the main concern shared by the bosses of Sony, Ricoh and many other Japanese companies – was the lack of clarity on the concrete steps Mr. Suga will take to change the energy mix. from the country.
The latest energy plan announced on Christmas Day projects that the use of renewable energy will increase from 18% of electricity in 2019 to 60% by 2050, and up to 40% produced from nuclear energy and carbon-fired power plants. capture technology.
The goals are ambitious and mark an important milestone for Japan that could become a defining feature of the Suga administration, who has so far struggled to differentiate himself from that of the former prime minister Shinzo abe.
However, the companies have requested more details on the plans. And the country’s record is not encouraging. After the Fukushima nuclear disaster in 2011, the government increased its dependence on coal instead of relaxing regulations that hamper the use of renewable energy. A decade later, discussions of resuming nuclear power remain largely taboo, while discussions of a future without nuclear power remain non-existent.
In the future, some professionals believe that Suga will need to present a more specific roadmap for his green energy goals while ensuring the stability of the electricity supply.
For Toyota, the world’s second-largest automaker has yet to prove how it will remain relevant in the electric car revolution. There is no doubt that Japan is behind the transition with electric vehicles and plug-in hybrids.
But for companies like Toyota and Sony to have any chance of success in the green era, the government needs to bring more clarity, quickly.
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