🚗Automotive Strategy Pivot: Japan's EV Investments Recalibrate as New Energy Technologies Emerge
Japan's auto industry faces significant challenges. 🎧AI-powered audio version is available in English and Japanese!
🎧🗣️Audio Version of this newsletter, thanks to NotebookLM
In English🇺🇲: Japan Climate Curation vol. 153 [12:35 min.]
In Japanese🇯🇵: Japan Climate Curation vol. 153 [5:11 min.]
*Editor’s note: This article was originally published on 5/21/2025 on Linkedin.
Welcome! I'm Hiroyasu Ichikawa, ichi, and this is issue 153 of the "Japan Climate Curation" newsletter📬, which has been curating hand-picked Japan-related climate news content every week since spring 2022, with over 460 subscribers [ more than 2,830 on Linedin]. You can subscribe by clicking on the Linkedin page or the form below.
I hope you find the articles below beneficial for reading (or skimming)!
Found this week's news insights valuable? Please give it a quick "like" or "share" on LinkedIn – you never know who else in your network might benefit from staying in the loop on Japan's climate scene🙂🙇
【Digest of this week's topics】
This week reveals Japan's divergent approaches to energy transition. While launching the Weather Attribution Center for climate research and planning a 2030s fusion power plant, Japan's auto industry faces significant challenges. Honda has reduced EV investments from ¥10 trillion to ¥7 trillion as its battery strategy struggles against Chinese competition. Toyota is revising its US EV strategy with Tesla charging standards while initially producing in Japan to avoid tariffs. Japan's hydrogen truck subsidy program signals continued alternative fuel interest, contrasting with South Korea's emergence as a nuclear power leader and Taiwan's energy challenges following nuclear shutdown. Meanwhile, Maruti Suzuki aims to expand in India, targeting "the next billion" car buyers beyond the affluent population.
*Disclaimer: Generative AI tools such as Claude Sonet 3.7 and NotebookLM have been used for summary and translation assistance. 🙂
[🇯🇵📰👀Japan Climate News Headlines]
【1】🌡️ Japan Launches Weather Attribution Center to Study Climate Change Impact [05/20 Bloomberg Green]
Japan launched the Weather Attribution Center (WAC) on May 20 to identify climate change impacts on extreme weather events. Following 2024's record heat, major wildfires, and heavy snowfall, WAC aims to determine within days how global warming affects disasters like heat waves, typhoons, and extreme rainfall. Founded by University of Tokyo professor Masahiro Watanabe and colleagues with initial funding from Fuyo General Lease, WAC focuses specifically on Japan's unique island climate and plans to eventually analyze economic impacts of weather disasters.
【2】⚛️ Japan Plans Pilot Fusion Power Plant for 2030s [05/20 Nikkei Asia]
The Japanese government plans to operate the world's first pilot fusion power plant in the 2030s, revising its 2023 Fusion Energy Innovation Strategy with a clear timeline. Fusion power produces less radioactive waste than fission, eliminates meltdown risks, and emits no greenhouse gases. The government allocated 10 billion yen to three research institutes while encouraging private sector participation. Over 80 companies, including Mitsubishi Heavy Industries and IHI, have joined the Japan Fusion Energy Council, while Kyoto Fusioneering launched the FAST project, demonstrating a unified public-private approach to strengthen competitiveness.
【3】🚗 Japan's Carmakers Threatened by US Tariffs, BYD Competition [05/14 NHK World]
Toyota and Honda expect lower profits this year while Nissan gives no forecast. An expert also warns that a mini EV from China's BYD will provide new competition.
【4】🔋 Honda Reduces EV Investment from ¥10 Trillion to ¥7 Trillion Amid Poor Demand [05/20 Bloomberg]
Honda has scaled back its EV investment plans from ¥10 trillion to ¥7 trillion ($48.3 billion) and lowered sales targets due to lackluster consumer demand and weakened environmental regulations. CEO Toshihiro Mibe stated that "EV investment hasn't been abandoned, just pushed back." The company has adjusted its 2030 global sales forecast, increasing hybrid vehicles from 2 million to 2.2 million, while EVs are now expected to account for about 20% of sales (700,000-750,000 units). Honda anticipates a $3 billion annual profit hit from Trump's tariffs and has delayed its Canadian EV supply chain plans by two years. Meanwhile, its motorcycle business remains strong with 40% of the global market share, aiming for 50% by 2030.
【5】🚙 Toyota to Launch New EVs in US with Tesla Charging Standard [05/20 Nikkei Asia]
Toyota is revising its US EV strategy, launching five new models and simplifying naming as Tesla's market share declines. The bZ4X will be renamed "bZ," while the off-road capable "bZ Woodland" co-developed with Subaru will launch in 2026. New lithium-ion batteries extend range by 25% and support Tesla's charging standard. Toyota's current 3% US EV market share has growth potential as Tesla's dominance falls from 80% to below 50%. Production will initially be in Japan with US manufacturing planned after 2026 to avoid tariff risks.
【6】🔋 [Opinion]Japan's Electric Car Battery Bet Running Out of Juice [05/15 Financial Times]
Japan's efforts to reduce dependence on Chinese electric vehicle batteries are faltering. Despite Panasonic's early advantage, Japanese battery makers have lost market share due to intense Chinese competition and automakers' slow transition to pure EVs. The government targeted 150 gigawatt hours of annual battery production by 2030, but financial deterioration across Japan's auto sector has undermined these plans. As Japanese automakers retreat and Chinese manufacturers expand into Japan, the window for securing a national battery supply chain is rapidly closing.
【7】🚙 Maruti Suzuki Targets India's "Next Billion" Car Buyers [05/20 Financial Times]
Maruti Suzuki, Suzuki's Indian subsidiary, is strategizing to regain its declining market share (41%) by expanding its target from the affluent 200-300 million Indians to "the next billion." Plans include doubling production to 4 million vehicles annually by 2030 and penetrating rural areas. They're investing in biogas technology from cow dung and Suzuki will invest $8.5 billion over five years in India. However, challenges include slow adaptation to SUV demand, foreign competition seeing India as "the new China," and price-sensitive consumers. While the Indian market presents growth opportunities, wealth disparity and urban infrastructure limitations constrain expansion despite the existence of 140 million consumers and 300 million aspirants.
【8】🚛Japan Launches Hydrogen Truck Fuel Subsidy Program [05/19 Nikkei Asia]
Japan's Ministry of Economy, Trade and Industry is launching a hydrogen fuel subsidy program for fuel cell trucks and buses in six priority regions to promote their adoption and reduce carbon emissions. The subsidy of 700 yen ($4.80) per kilogram covers about 75% of the price difference between hydrogen and diesel fuel. For large fuel cell trucks, this means savings of around 21,000 yen per refill. Currently, about 160 fuel cell trucks operate in Japan, but the government aims to increase this to over 17,000 units by 2030 to achieve decarbonization. The program will use 46 billion yen from the fiscal 2024 supplementary budget and fiscal 2025 budget plan.
【9】⚡ Taiwan Faces Energy Crunch After Nuclear Plant Shutdown [05/16 Bloomberg]
Taiwan's decision to shut down its last nuclear reactor is influenced by the 1996 anti-nuclear waste protests on Orchid Island and the 2011 Fukushima disaster. This closure occurs as energy demand is projected to increase by 13% by 2030, affecting semiconductor companies like TSMC. Each reactor shutdown adds approximately $500 million in annual LNG import costs, with Taiwan Power Company accumulating $14 billion in losses. Recent legislation has opened the possibility for nuclear restarts, but the Maanshan plant closure will proceed as scheduled. After shutdown, 84% of Taiwan's electricity will come from fossil fuels, making environmental goals more difficult to achieve.
【10】⚛️ South Korea Emerges as Nuclear Power Industry Leader [05/15 Bloomberg]
As nuclear power gains renewed importance to address climate change and AI-driven energy demands, South Korea emerges as a leading exporter in the industry. With over 50 years of continuous reactor construction experience and tight government-private sector collaboration, Korea delivers projects on time and within budget. After successfully completing the $20 billion Barakah project in the UAE, it became the preferred bidder for an $18 billion Czech project. Korea is positioned to win business with 43% of the 400+ planned and proposed reactors worldwide. While challenges include potential policy shifts following President Yoon's impeachment and criticism over low-cost labor practices, Korea's competitiveness stands out compared to the significant delays and cost overruns plaguing Western nuclear projects.
📬That's all for this week! Thank you for reading(or skimming) 🙇. I hope you will have a wonderful week ahead!
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ichi (Hiroyasu Ichikawa)