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Japan Planning for All-Electric CarsToyota Motor Corp (NYSE:TM) Executive Warns It Could Hurt Business

Japan has said that it is planning to stop the sale of new gasoline cars by the mid-2030s, contrary to Toyota Motor Corp (NYSE:TM) President’s criticism that the quick shift to electric cars is likely to cripple the automobile industry.

Japan wants only all-electric cars by 2035

On Friday Japan released the plan following in the steps of major European countries and the state of California. However, the plan has faced resistance from executives of car manufacturers in the country that makes millions of vehicles each year powered by gasoline engines. According to the plan, Japan could still allow the sale of hybrid fuel-electric cars beyond 2035. Most of the top car makers in Japan such as Honda Motor Co, Nissan Motor Co, and Toyota offer both hybrid and traditional gasoline car models.

At the beginning of this month, Toyota President Akio Toyoda indicated that a ban on gasoline-powered cars and a quick shift to electric could hurt the industry. Toyoda said that the current automobile industry business model is likely to collapse if the country bans gasoline cars. He spoke on behalf of Japanese automakers as the head of the local industry association. Toyoda explained that the electric grid will not manage additional summer demand since most of the country’s electricity is generated through fossil fuels.

Automakers should revise business models to adapt

However, government officials have told car manufacturers to revise their business models. For instance, Prime Minister Yoshihide emphasized in Toyoda’s comments in which he had said that he supports the goal of making the country carbon neutral by 2050. Suga said that carbon emission reduction should be considered as a strategy for growth rather than a growth limitation.

The plan announced on Christmas Day also included efforts to introduce around 45 gigawatts of off-shore wind-energy capacity in the next two decades. This capped a year where most economies globally made renewable energy targets and efforts towards having electric cars. Japan is calling for all new cars sold from 2035 to be electrified including the hybrid-electric models and those that use hydrogen fuel cells.

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