Japan to Phase Out Gasoline-Powered Cars, Bucking Toyota Chief
All new vehicles must be hybrids or fully electric starting in mid-2030s, government says
TOKYO—Japan said it planned to stop the sale of new gasoline-powered cars by the mid-2030s, bucking criticism by Toyota Motor Corp.’s chief that a rapid shift to electric vehicles could cripple the car industry.
The plan released Friday followed similar moves by the state of California and major European nations, but it has faced resistance from auto executives in a country that still makes millions of cars annually that run solely on gasoline engines.
Japan would still permit the sale of hybrid gas-electric cars after 2035 under the plan. Many models from Japan’s top car makers—Toyota, Honda Motor Co. and Nissan Motor Co. —come in both traditional and hybrid versions.
Earlier this month, Toyota President Akio Toyoda said that if Japan banned gasoline-powered cars and moved to electric vehicles too hastily, “the current business model of the car industry is going to collapse.” He was speaking on behalf of Japanese auto makers in his role as head of a local industry association.
Mr. Toyoda said the electricity grid couldn’t handle extra summer demand and observed that most of Japan’s electricity is generated by burning fossil fuels.
Government officials said car makers needed to revise their business models. Prime Minister Yoshihide Suga pointed to a different portion of Mr. Toyoda’s comments in which the Toyota chief said he backed the government’s goal of making Japan carbon-neutral by 2050. Reducing carbon emissions “should be tackled as a strategy for growth, not as a limitation on growth,” Mr. Suga said.
Japan’s Christmas Day release, which also included a plan to introduce as much as 45 gigawatts of offshore wind-power capacity by 2040, capped a year in which major economies around the world competed to outdo each other in setting targets for renewable energy and electric cars.
In September, Chinese leader Xi Jinping said in a video message at the United Nations that China would go carbon-neutral by 2060, meaning it would have net zero emissions of carbon dioxide. A month later, Mr. Suga jumped ahead of Mr. Xi with a pledge to do the same a decade sooner, matching the European Union’s target.
The Japanese government’s plan calls for all new cars sold in the country from the mid-2030s onward to be electrified. That includes electric vehicles, hybrid gas-electric models and cars whose electricity is generated by hydrogen fuel cells. The plan says the cost of batteries should be reduced so that electric vehicles cost about the same as gasoline-powered vehicles a decade from now.
An outline of the plan released by the Ministry of Economy, Trade and Industry expressed concern that Europe and China were jumping ahead of Japan. It observed that sales of electric and plug-in hybrid vehicles more than tripled in the EU in the July-to-September quarter to around 270,000 units, while the equivalent figure for Japan was about 6,000.
Masayoshi Arai, a ministry official, said “Japan is very far behind” on vehicle electrification.
Japanese auto executives bristle at such statements, saying more hybrid gas-electric vehicles are sold in Japan than in any other country. Some question whether fully electric vehicles such as those made by Tesla Inc. are more environmentally friendly than hybrids given the carbon dioxide emitted in producing EVs and their parts.
“It is absolutely not the case that Japan is behind,” said Toshihiro Mibe, a Honda executive who heads an industry council on environmental technology.
Japan’s move, combined with those in China, Europe and California, adds pressure on global auto makers to shift more quickly to electric vehicles, although for now many are getting their profits from U.S. consumers hungry for gasoline-powered trucks and sport-utility vehicles.
Toyota and Honda have yet to release specific plans for mass-market electric vehicles in the U.S. and Japan, putting them behind the likes of Volkswagen AG , which plans to invest around $86 billion in developing electric vehicles and other new technologies over the next five years. Nissan says it will sell the Ariya, an electric crossover SUV, next year in the U.S. and other markets.
The announcement comes as the U.S. is poised to increase federal investment in the development of electric vehicles under an energy plan President-elect Joe Biden aims to implement after taking office in January.
Mr. Biden has pledged to create 1 million new jobs in the auto industry, including in the construction of electric-vehicle charging stations. His energy plan calls for a half-million new charging stations in the U.S.
The president-elect has said he hopes to use federal incentives—including tax, trade and investment policies as well as increased research and development—to make the U.S. the global leader in electric-vehicle manufacturing.
He has said he would encourage the public to switch to more environmentally friendly vehicles by offering rebates to consumers and incentives to manufacturing facilities that build parts for low-emissions vehicles. He also wants to strengthen federal fuel-economy standards for vehicles.
Mr. Biden’s presidential transition team didn’t immediately respond to a request for comment.