Weekly Japanese Industry and Policy News (October 20-October 26, 2023)

The EU-Japan Centre is pleased to start a new weekly service by publishing brief summary of the latest information from the Japanese governmental organizations & private companies/organizations. A couple of minutes reading to be informed about what is happening in Japan's policy, economy, EU-Japan relations, and innovation.

*Information is deemed correct at the time of release. 

Toyota adopts Tesla method as charging standard in North America
Toyota Motor Corporation announced on October 20 that it will adopt Tesla's fast charging standard "NACS" from 2025. NACS accounts for about 60% of quick chargers in the United States, and companies such as Nissan and Honda have decided to adopt it. There are concerns that vehicle data will be collected through chargers, but the reality is that it has no choice but to adopt Tesla's charging standards, which are becoming standard in the United States.

Toyota plans to produce an electric sports utility vehicle (SUV) with three rows of seats starting in 2025 in the U.S. state of Kentucky. Some Toyota and Lexus brand EVs that will be produced and sold from the same year will be compatible with NACS. Until now, North America has adopted a separate standard called Combo (CCS), and customers with already-sold EVs will be provided with NACS-compatible adapters.

The move to adopt a rival's charging standard comes as Tesla dominates the North American fast charger market. Tesla operates more than 12,000 "Supercharger" fast chargers in North America, with a market share as high as 60%. It features a "plug and charge" function that automatically performs authentication, charging, and billing just by plugging in the charging plug. Since the output is high, compatibility with NACS will lead to improved convenience for customers.

Toyota website:
https://pressroom.toyota.com/toyota-adopts-the-north-american-charging-standard-to-expand-customer-charging-options/

METI raises EV charger installation to 300,000 by 2030
The Ministry of Economy, Trade and Industry (METI) announced on October 18 that it aims to double the number of chargers from the previous 150,000 to 300,000 by 2030 in order to accelerate the development of charging infrastructure toward building an EV society. Furthermore, towards 2030, the average output of quick charging will be doubled from the current approximately 40 kW to 80 kW, and the total output of the entire charger will be increased 10 times from the current approximately 390,000 kW to approximately 4,000,000 kW.

This policy was being considered by the “Study Group on the Promotion of Charging Infrastructure Development”, an advisory body to the METI. And the METI conducted public comments from August to September this year and formulated these guidelines. The main points are as follows.

‒    Setting a goal comparable to the world: doubling the charger installation target
‒    High output: 90kW or more, and even 150kW will be installed on expressways. Aim for 50kW or more on roads other than expressways.
‒    Efficient charger installation: Prioritize cost-effective projects
‒    Response to regulations and systems: Implement pay-per-use billing starting in FY2025 to realize a more sustainable pricing system for both users and operators.

The METI aims to create a highly convenient and sustainable charging infrastructure society by comprehensively considering the three principles of "improving user convenience," "increasing the independence and sophistication of charging businesses," and "reducing the burden on society as a whole." 

METI website (in Japanese):
https://www.meti.go.jp/press/2023/10/20231018003/20231018003.html

Kansai Electric Power and JFE Steel begin joint study and investigation of CCS project
Kansai Electric Power and JFE Steel announced on October 19 that they have signed a memorandum of understanding regarding joint consideration and investigation of costs and technical requirements for CCS projects. Based on the memorandum, the two companies will collect, liquefy, and store CO2 emitted by Kansai Electric Power's thermal power plants and JFE's steel plants, and then transport it by ship to storage sites such as depleted oil and gas fields and aquifers in Japan and overseas. They will jointly consider and investigate projects involving underground storage.

Through this initiative, they will sort out various issues related to the technology and cost required for CCS projects, evaluate the feasibility of the project, and accelerate consideration toward realizing a carbon-neutral society. The two companies will consider concretely technical requirements and costs related to CO2 capture, liquefaction, temporary storage, and loading at thermal power plants, as well as technical requirements related to CO2 transportation by ship and underground storage.

JFE Steel Corporation website (in Japanese):
https://www.jfe-steel.co.jp/release/2023/10/231019.html

Japan and Denmark cooperate on floating offshore wind power generation
On October 24, Minister of Economy, Trade and Industry Nishimura met with Prime Minister Frederiksen of the Kingdom of Denmark and exchanged views on the development of economic relations between Japan and Denmark. Also, at the event, the two countries held a ceremony to exchange a memorandum of understanding on hydrogen and ammonia cooperation, and a basic agreement on cooperation in floating offshore wind power generation. In particular, with regard to wind power generation, Denmark, which has the world's top manufacturers and operating companies, and Japan's technology, which has floating know-how, are expected to make strides in the global market.

Denmark is home to Vestas, the world's leading wind power producer, and Orsted, the world's leading wind power producer. In Japan, companies such as Japan Marine United, Mitsui Marine Development, and Hitachi Zosen have expertise in floating structures. Denmark seems to be partnering with Japan because it believes that Japan has the shipbuilding technology essential for floating ships and that it is a market that can be expected to be introduced on a large scale.

Floating systems are essential for the spread of renewable energy in Japan. Regarding offshore wind power, the government is aiming to select an operator for power generation facilities for 10 million kilowatts in 2030 and 30 to 45 million kilowatts by 2040. Floating systems are expected to become the mainstream for offshore wind power generation by 2040. Floating systems require a combination of not only wind turbine technology but also shipbuilding technology to float equipment on the sea. At present, mass production technology has not yet been established anywhere in the world.

METI website (in Japanese):
https://www.meti.go.jp/press/2023/10/20231024001/20231024001.html

Toyota unveils Lexus EV with a cruising range of 1,000 km, scheduled to be launched in 2026
On October 25, Toyota Motor Corporation unveiled the world's first prototype of the E), which is scheduled to be released in 2026. The EV prototype car from the luxury car brand Lexus has a cruising range of approximately 1,000 km, and is also equipped with its own in-vehicle operating system (OS), Aline. It was unveiled to the press ahead of the opening of the Japan Mobility Show on October 26.

The Lexus prototype car is a sedan type car that uses conventional lithium-ion batteries with higher energy density and can travel 1,000 km on a single 20-minute charge. It is equipped with a new EV-specific platform (chassis) and uses the "Gigacast" technology, which is integrally molded with aluminum casting. It is also designed to be equipped with all-solid-state batteries, which are expected to be put into practical use as early as 2027. In addition to Lexus vehicles, prototype EV vehicles such as Toyota brand SUV and sports vehicle types were also unveiled for the first time.

Toyota website:
https://global.toyota/en/newsroom/lexus/39888392.html

INPEX and Osaka Gas launch one of the world's largest methanation projects
On October 24, INPEX and Osaka Gas announced that the construction of test facilities for the world's largest methanation-based CO2 emission reduction and effective utilization technology development project has almost been completed, and the main construction of the plant has begun. Trial runs and start of operation are scheduled for some time in 2025.

The test facility will use CO2 recovered within the INPEX plant to produce synthetic methane, which will be supplied to customers using INPEX's city gas pipeline. Since 2017, INPEX has been developing basic CO2 methanation technology with a synthetic methane production capacity of 8Nm3-CO2/h. In this initiative, it will be in charge of overall project coordination, commercialization considerations, equipment construction, and will be in charge of operating the plant once it is completed.

Osaka Gas will provide its engineering capabilities, including catalyst technology that enables energy-saving production of synthetic methane and design know-how for scale-up, to design test equipment and optimize processes. The test facility is expected to produce 400Nm3-CO2/h, which is equivalent to the power needed by 10,000 households, making it one of the largest in the world.

INPEX website:
https://www.inpex.co.jp/english/news/assets/pdf/20231024.pdf

Mitsubishi Motors announces withdrawal from China
Mitsubishi Motors announced on October 24 that it will withdraw from automobile production in China. With the rapid shift to electric vehicles (EVs), the market share of local cars has increased, and Japanese cars are no longer able to survive on their strengths of quality and fuel efficiency alone. Due to the withdrawal, a loss of JP¥ 24.3 billion will be recorded in the fiscal year ending March 2024. This has been factored into the full-year earnings forecast, and there are no revisions to the forecast.

GAC Group invested 50% in GAC Mitsubishi, Mitsubishi Motors owns 30%, and Mitsubishi Corporation invested rest 20%. The joint venture will continue, but Mitsubishi Motors and Mitsubishi Corporation will withdraw their investments. The company plans to continue servicing the cars it currently sells in China. Japanese cars have continued to be inferior in China since the beginning of 2023. This is due to the rapid spread of EVs in China and the increasing brand power of local companies. According to the China Automobile Manufacturers Association, EV sales in 2022 were 5.36 million units, an 80% increase from 2021, and EVs accounted for 20% of new car sales.

In the 2000s, major Japanese automobile companies set up joint ventures with Chinese companies, expanded into local production of passenger cars one after another, and increased production scale. Therefore, if the struggles faced by automakers spread to parts and materials, there is a risk of destabilizing the automobile supply chain.

MITSUBISHI MOTORS CORPORATION website:
https://www.mitsubishi-motors.com/content/dam/com/ir_en/pdf/irtop/2023/20231024-01.pdf