Toyota CEO: Going All-EV Could Cost Japan Millions Of Jobs

"In achieving carbon neutrality, the enemy is carbon dioxide, not internal combustion," Akio Toyoda argues.

Akio Toyoda presiding over the JAMA September 9 press conference 2

Dan Mihalascu

By: Dan Mihalascu

Sep 20, 2021 at 6:51am ET

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Toyota CEO Akio Toyoda, who is also the chairman of Japan’s automaker association, is not happy with the Japanese government’s EV-centric push for carbon neutrality.

The executive said that going all-EV could cost Japan 5.5 million jobs and 8 million units of lost vehicle output by 2030. At a regular meeting of the Japan Automobile Manufacturers Association (JAMA) where he was joined by top execs from Honda, Yamaha, and Isuzu, Toyoda warned that the potentially overzealous green manufacturing goals pushed by Europe-inspired Japanese authorities are unsustainable.

The government aims to slash Japan’s greenhouse gas emissions by 2030 and reach net carbon neutrality by 2050 by going all-EV. However, Toyota’s CEO believes the road map should take into account the reality that Japan’s economic lifeblood stems from manufacturing.

A sudden shift to EVs could undercut Japan’s industrial base, Toyoda argues, so he proposes a wider approach to carbon reduction instead.

"Japan is an export-reliant country. Thus, carbon neutrality is tantamount to an issue of employment for Japan. Some politicians are saying that we need to turn all cars into EVs or that the manufacturing industry is an outmoded one. But I don't think that is the case. To protect the jobs and lives of Japanese people, I think it is necessary to bring our future in line with our efforts so far.”

Gallery: Japan Automobile Manufacturers Association Press Conference Presided Over By Akio Toyoda

Akio Toyoda presiding over the JAMA September 9 press conference 1

Akio Toyoda presiding over the JAMA September 9 press conference 3 Slides from JAMA September 9 press conference 1

Source: Toyota

The executive noted that Japanese automakers produce about 10 million vehicles a year at home, about half of which are exported. He cited forecasts projecting that by 2030, domestic plants will still be making 8 million vehicles a year equipped with combustion engines, including hybrids and plug-in hybrids.

Once those vehicles are banned, automakers will take a big hit, Toyoda said, leaving companies with a tough decision: either send production of such vehicles overseas or end it entirely.

"This means that production of more than 8 million units would be lost, and the automotive industry could risk losing the majority of 5.5 million jobs. If they say internal combustion engines are the enemy, we would not be able to produce almost any vehicles.”

When it comes to offering solutions, Akio Toyoda argues that the path to carbon neutrality should be adapted to each country's conditions. More specifically, there should be more freedom on which technologies are used to get there, as long as the result is the same: an overall reduction in carbon emissions.

"In achieving carbon neutrality, the enemy is carbon dioxide, not internal combustion. To reduce carbon dioxide emissions, it is necessary to have practical and sustainable initiatives that are in line with different situations in various countries and regions."

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Unsurprisingly, Toyoda says that hybrid vehicles still have significant contributions to make toward carbon neutrality, even though they are equipped with internal combustion engines. That’s because hybrids are more affordable than EVs and can penetrate markets where charging infrastructure is nonexistent.

In addition, technical improvements are making hybrids cleaner each year. At the same time, hybrids can be used as a bridge technology toward EVs and zero emissions, helping lessen the blow to jobs that make parts for engines and transmissions.