Media Mix, Jan. 31, 2021

Here’s this week’s Media Mix about a press conference given by Akio Toyoda, the president of Toyota Motors and the chairman of the Japan Automobile Manufacturers Association, about the government’s plan to ban gasoline-powered vehicles by the year 2050. Though Toyoda’s remarks, which mostly take the government to task for its plan, are self-serving, he is correct in saying that the government is just as responsible as automakers for making the future they envision a reality. The reason that electric vehicles are selling well in Europe and China is that their governments have already started creating an environment where they can sell, mainly by helping set up networks of charging stations through subsidies and other incentives. As one of the pundits said on the Abema News program cited in the column, consumers generally don’t care much about the EV discussion, and probably less about the environment in general, at least when it comes to cars. They will only buy a certain type of car if it’s convenient in terms of their needs. In that regard, automakers’ main responsibility is getting EVs to travel longer distances on a single charge, which they are doing, but people who are buying EVs tend to use them for short journeys and errands. There’s still some resistance to EVs for use on long trips, which may be why sales in the U.S. aren’t as brisk as they are in Europe and China. In America, people still take long car trips, and when gas prices are low they travel a great deal. But now that GM has announced that they, too, will stop making gas-powered cars in the near future, it’s obvious that the U.S. is also reckoning with a sea change in its attitude toward transportation.

But there are other problems to address besides the lack of charging facilities. Toyoda focuses on the electric power grid, saying that Japan will need to produce a lot more electricity if all the cars on the road are EVs. That’s another thing the government has to do because the automotive industry can’t. And whether the increase in power output leads to more CO2 is a matter that must be considered in line with the move to EVs. But another problem is waste. All these EVs will run on batteries that don’t last forever, and disposing of them will create another environmental hazard. So far, there has been little discussion on what to do about battery waste or recycling. Another pundit on Abema News said that Japan doesn’t have the “ability” to make these kinds of batteries now that Panasonic no longer makes them for Tesla, the world’s leading EV maker. Battery technology will become much more important in the future and thus this pundit is worried that Japan will lose part of its technological edge unless automakers start making their own batteries. And while Toyoda also fretted about the negative impact a switch to EVs would have on employment, since much fewer parts go into an EV as go into a gas-powered car or a hybrid, he didn’t say anything about software, which will become the main manufacturing concern when EVs dominate. As one pundit said, EVs will be more like smart phones than like cars, meaning they have to be constantly upgraded. The tech companies that control this software will control the industry. 

But one more consideration that probably has Toyoda worried is increased interest in ESG (environmental, social and governance) investments, which have boosted Tesla stock prices through the roof. Toyota, as a maker of gas guzzlers, does not benefit from such investments, and if it doesn’t get on the bandwagon now they could be left behind. Of course, Toyota is still working on hydrogen cell cars, but without a clear future in terms of sales no one is going to invest in such technology, no matter how “green” it seems. In fact, the pundits on Abema News said that the person who put the bug in Prime Minister Yoshihide Suga’s ear about going all-EV was Hiromichi Mizuno, a member of the Tesla board of directors and former chief officer of Japan’s government pension investment fund. One pundit wondered if Toyoda’s rant was not simply an angry reaction to this intelligence, which, apparently, everyone in the industry knows about. 

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1 Response to Media Mix, Jan. 31, 2021

  1. James Barends says:

    Your piece about electric cars adn Toyoda smacks of elitism adn is flat out off base. It is a trendy style to say electric cars are the future and governments around the work are pushing the ide, but that is when a little reality sets in. First, you never explain exactly where the electricity comes from. In the US going to 100% electric cars would require a grid 250% the size of what exists today. Building that grid would cost between $9-10 Trillion. You could cover the South West with photo cells and it could never meet the needs so it means nukes, gas turbines and coal. Just reality. Japan’s situation is even worse. There are few locations in the country for power plants for a number of reasons and rebuilding the transmission infrastructure is extremely difficult. Where exactly is that money coming from?

    What are you going to use for the batteries? The known reserves of Lithium and other rare earth metals needed wold not cover more than 30% of the total demand adn it is nearly impossible to build process plants unless you want China to have a monopoly and in the process vent large amounts of nasty emissions. Again, it is reality.
    I am an engineer by background and understand teh science and the reality based issues far better than most. BUT as a engineer, I want to know where we are going with this and what teh risks are. For all the hype about CO2 the dirty truth is it has been declining over millions of years and we have no reason to explain it. IF you want to change the level of CO2 so badly, what are we supposed to change it to? Where is the science showing what levels are best for life adn the biosphere? You won’t find any studies. But to explain a little of the risks you are so willing to embrace, can you tell me the levels of CO2 that are starvation for our food crops? They need a minimum or they die. I know people who have done sealed green house experiments and they tell me we are not far above that level. When CO2 gets low plants become vulnerable to disease, drought, and other environmental factors. The CO2 levels during the little ice dropped down to within 10% of that level and crop failures were common and millions starved. There is actually evidence that the American Chestnut Tree disaster 150 years ago corresponded to a dip in CO2. Did YOU know that the wonderful vibrant flowers at the florist shop are grown in sealed greenhouses that use 2 to 3 TIMES the CO2 levels in the atmosphere? Well over 90% of all plant life evolved 8-15 million years ago with much higher CO2. Where is the resear and the proof we are smart enough to play this game.

    You ended the piece with a rather snide comment about Toyota’s self interest. MY self interest is making sure we stay alive. Nor is Toyota wrong. The question is what are the best conditions for life and no one pushing electrics etc. has EVER addressed that. That should be the most important and driver driver of all. Curious that it is completely ignored.

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