When Japan played host to Group of Seven leaders last week, the country’s top auto executives formed a united front to deliver a familiar message:
Let’s throw everything we’ve got at carbon emissions reduction, and not just batteries.
It’s an appeal that Akio Toyoda of Toyota Motor Corp. has been making for several years, and one that he’s caught grief for as carmakers led by Tesla Inc. and BYD Co. stomp the accelerator on electric-vehicle production.
“I think I have spoken the truth,” Toyoda said in what would be his last New Year’s greeting to staff as chief executive officer. “I said these very obvious things, and was bashed terribly.”
Two weeks later, Toyoda announced he’d cede the CEO role to Koji Sato, who’d been the head of Lexus. But in a surprise move prophetic of what happened in Hiroshima last week, he was asked to stay on as chairman of the Japan Automobile Manufacturers Association, or JAMA. The group staged an exhibition alongside the G7 summit that highlighted hydrogen and carbon-neutral fuels, in addition to EVs.
The harmony of Japan’s car lobby stands in stark contrast to the European Automobile Manufacturers’ Association, which lost several members last year that didn’t see eye to eye with others on how best to confront climate change. JAMA’s unanimity also has massive implications for the global energy transition, as Japan remains the world’s largest passenger car exporter.
Bloomberg spoke with the CEOs of five Japanese auto manufacturers last week about how they’ve coalesced around a consensus: A diverse set of powertrains and alternative fuels will be needed to reduce emissions for as long as battery materials are scarce and the power used to recharge EVs is still switching over to renewable sources.
Read on for highlights from those conversations.
Say Yes to B.S.
One potential solution Suzuki Motor Cop. sees as promising involves shoveling you-know-what.
In January, the majority-owner of India’s dominant car manufacturer announced a deal with a government agency and Asia’s largest dairy manufacturer to verify that biogas derived from cow manure could be used to power Suzuki models running on compressed natural gas.
EVs are unlikely to take off in India until household access to electricity is closer to universal, President Toshihiro Suzuki said. “It’s wrong to assume that there’s only one solution,” he said, adding that the world is “a bit over-focused” on battery-electric vehicles.
Bad Fits for Batteries
Isuzu Motors Ltd. applied the name Giga to one of its big rigs decades before Elon Musk was using it as a prefix for his factories. Yamaha Motor Co. makes relatively itty-bitty scooters and golf carts. Both are picking their spots with respect to batteries.
Packs full of cells are ideal for little two-wheelers and tooling around on the links. But it’s “not at all possible” to use batteries in Yamaha’s big motorboats, CEO Yoshihiro Hidaka said.
Whereas boaters can bring a backup tank of gas in case they run out of fuel, batteries are too heavy to carry around extras. Hydrogen fuel cells could work better, and the company has started its own research and development efforts.
Isuzu showcased its first mass-produced EV, the Elf N-Series, in Hiroshima. It offers only about 60 kilometers (65 miles) of battery range compared to the roughly 600 kilometers one can drive on a tank of fuel.
“It’s not like Japanese automakers want to take an easy solution, or like to go the effortless way,” CEO Masanori Katayama said. “If somebody could pinpoint the right answer as to whether it should be battery-electric vehicle, or it should be fuel cell-electric vehicle, that would be easier on our part, because our R&D could focus upon such areas. But we don’t have such an answer, at least as of now.”
Hot and Lukewarm
Honda Motor Co. CEO Toshihiro Mibe was the most bullish on EVs, which is no surprise given its moves of late. In March, the carmaker broke ground on a new $4.4 billion lithium-ion battery plant in rural Ohio. It has partnered with both General Motors Co. and Sony Group Corp. on EVs.
Still, hydrogen also will be part of the mix. The carmaker announced plans last week to develop and supply fuel-cell systems for heavy-duty trucks that Isuzu plans to introduce in 2027.
“The objective is achieving carbon neutrality,” Mibe said. “There are many different technologies that help us do that.”
Mazda Motor Corp. generated less than a quarter the revenue Honda did last fiscal year, and has an even smaller fraction of cash compared to its peer.
In November, Mazda said it will approach electrification in phases through 2030. EVs will be between 25% and 40% of global sales by then — a wide range that reflects management’s uncertainty as to how quickly plug-in vehicles will take off.
“We are a rather small-scale manufacturer, so we can’t take the same approach as the big players,” Akira Marumoto, who will step down as Mazda’s CEO next month and hand over control to Masahiro Moro. “We have to monitor what’s happening in the marketplace and with our customers.”
--With assistance from Nicholas Takahashi.
