Electric Car

Car Electrification May Cause 200,000 People Be Laid off in Japan

Electric vehicles are a breakthrough in controlling climate change and using technology to reshape business. However, for Japan and Germany, two countries whose economic success depends on fuel vehicles, the elimination of internal combustion engine vehicles will bring about serious layoffs.

Japan hopes that all new cars after 2035 will be electric cars, but given that gasoline cars account for 60% of Japan’s car supply, this is a daunting goal. In addition to gasoline vehicles, hybrid vehicles account for more than 30% of the market, and pure electric vehicles, plug-in hybrid vehicles and fuel cell vehicles together account for only 1%.

16% of Japan’s carbon dioxide emissions come from automobiles, so reducing emissions in the automotive sector is very important. Japan’s highway road-map to reduce carbon emissions shows: “In the next 10 years, we will vigorously promote electric vehicles.” Popularization of electric vehicles requires more technological progress. For example, by 2030, battery prices will drop from the current 150$/kwh to 100$/kwh or less.

Now, the world is phasing out fuel-powered vehicles. Many international markets such as the Netherlands and the UK plan to ban the sale of internal-combustion vehicles by 2030, which in turn stimulates global competition in the development of electric vehicle applications. The electric vehicle revolution has enabled the American automaker Tesla to surpass Toyota in market value. At the same time, Chinese companies such as CATL are also leading the field of electric vehicle batteries.

A Honda executive said that “Japan must not stand idly by” when global competitors are scrambling to join the electric car race. Isuzu Motors executives said that this sense of panic has extended to commercial vehicles and mini-cars (these two areas are difficult to have an impact), “we will not be behind anymore.”

However, industrial construction based on the production of traditional cars has always been the driving force behind the Japanese economic system, and its energy status alone will make the transition difficult. Akio Toyoda, President of Toyota and Chairman of the Japan Automobile Manufacturers Association, said: “I believe that without a technological innovation breakthrough, it is impossible to achieve the goal in 2030. Our global competitiveness may be at risk until the entire supply chain tries to make changes.”

In January 2020, a German government agency announced its worst state of affairs. By 2030, the electrification of automobiles will result in a reduction of approximately 410,000 jobs in the German automotive-related industry, which is about half of the current approximately 800,000 jobs.

In Japan, 910,000 people work in the automotive industry and 690,000 people work in parts-related fields. Gasoline cars have about 30,000 parts, but electric cars have only half of them. A merger and acquisition expert said: “More and more small and medium-sized engine parts companies are consulting on how to promote company development.”

Shigenobu Nagamori, president of Japanese engine manufacturer Nidec, predicted that by 2030, once electric vehicles occupy half of the market, the value of a car will drop by 80%. An analyst calculated that if all cars were turned into pure electric vehicles or hybrid vehicles, Japan would lose 200,000 jobs.

Japan is promoting investment in next-generation technologies such as storage batteries to reshape the country’s industrial construction, while striving to create new jobs in areas such as charging infrastructure. In addition, Japan may provide additional help for small and medium-sized suppliers to adapt and reshape their business. Hiroshi Kajiyama, Minister of Japan’s Economic System, said: “We hope to create a Japanese economic system that will achieve a virtuous circle of economic systems and the environment.”

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