Automobile

[Japan’s overall motor vehicle market]

Looking back at the domestic motor vehicle market in 2023, the number of new vehicles sold (registered vehicles and kei cars combined) was 4,779,086 units (up 13.8% from the previous year) and sales of registered vehicles alone also increased, reaching approximately 3.03 million units. Sales of foreign-brand four-wheelers, mainly European cars, in 2023 increased 2.5% year-on-year to 248,329 units, marking the first year-on-year increase in two years since 2021. In particular, sales of imported BEVs reached 22,890 units, exceeding 20,000 units for the first time. It was 1.6 times the result of 2022, posting record high figures for five years in a row.

In the first half of 2024, the number of new vehicles registered was about 1.4 million units, which was the first time in two years that first-half sales fell below the previous year. Sales of foreign-brand vehicles were down 7.2 percent from a year earlier to 113,887 units.

(1)  Electrification/Green Transformation (GX)

Imported EVs continued to sell well at 10,785 units, up 16.7 percent from a year ago. The background to this is the ongoing and seamless subsidy policy for electrified vehicles, which JAIA had requested, contributed greatly. We would like to express our gratitude once again. In this rapidly changing market, EBC Automobile Committee member companies will continue to accelerate the introduction of BEVs, PHEVs and other new models equipped with advanced safety and environmental technologies. Meanwhile, compared to other major G7 countries, Japan still has many challenges to overcome in terms of selling xEVs and installing the infrastructure necessary for their widespread use, although some progress has been made. Last year, establishing a study group on promoting the development of charging infrastructure, the government published the “Guidelines for Promoting the Development of Charging Infrastructure,” in October doubling the previous target for the installation of chargers by 2030 from 150,000 charging points to 300,000 sockets. The EBC hopes that the government’s infrastructure development policies will be steadily implemented in the future.

As it is necessary to accelerate the spread of xEVs, which contributes to achieving carbon neutrality, we request the government to continue to provide uninterrupted, ongoing support for subsidies for the purchase of xEVs, and to consider broad and flexible review of eligibility requirements for subsidies. In addition, to achieve carbon neutrality, it is important not only to focus on electric passenger cars, but also on electrifying commercial vehicles such as buses and trucks and using hydrogen.

Further, we would like to express our gratitude to the authorities for the system reforms made to electrical technology standards last October, which have made it possible to provide high-voltage, high-output (DC1,000V/350kW) charging at levels comparable to those in Europe and the United States. Going forward, since basic charging is still not sufficient, particularly in urban areas, it will be important to improve basic charging facilities, including in apartment complexes and improve public charging facilities around residential areas to supplement it, promote the installation of chargers on public roads, as well as create mechanisms for temporary exits to alleviate charging congestion on expressways as en-route charging (for example, use of chargers outside expressways near interchanges), and develop charging infrastructure in tower parking lots and mechanical parking systems, etc. We hope that the installation of chargers on public roads will further expand and will be rolled out to regional areas.

Furthermore, regarding the reuse and recycling of batteries, which are essential for promoting electrification, the European Battery Regulation came into force in July, providing clear provisions on recycling and reuse, etc. We will continue to closely monitor developments in other countries, including this regulation, and will work closely with relevant authorities and businesses to take appropriate measures to promote the recycling and reuse of batteries throughout their life cycle.

(2)  Digital transformation (DX) (including automated/autonomous driving)

The Japanese government launched the Mobility DX Study Group in FY2023 to address themes related to wireless and technology connections, including automated/autonomous driving, and the EBC Automobile Committee has been closely monitoring the content of the study group. In May of this year, the study group published the Mobility DX Strategy, setting DX as a competitive axis alongside GX in the future of automobiles and mobility. In particular, it states that Software Defined Vehicles (SDVs) will be regarded as a competitive area and promoted from 2030 to 2035. The EBC Automobile Committee will continue to gather information with an eye toward the evolution of automated/autonomous driving technology.

We will also continue to call for the international harmonization of radio and communication technologies and for system reforms to bring software updates via OTA into line with the times, as it has previously requested.

(3)  Introduction of International Whole Vehicle Type Approval (IWVTA)

Regarding safety and regulatory harmonization issues, the EBC Automobile Committee has continued to work toward the complete abolition of NTM and the realization of a “full IWVTA (International Whole Vehicle Type Approval)” as one of its most important issues. The Automobile Committee will continue to review implementation status with relevant parties and will continue to request further promotion of international harmonization of vehicle regulations and the realization of a “complete IWVTA.”

(4)  Automobile recycling

A major development regarding automobile recycling was the announcement of proposed ELV regulations in Europe last July. In Japan, discussions are also underway regarding the use of recycled plastics as part of promoting the circular economy.

The EBC Automobile Committee will continue to closely monitor the progress of the institutionalization of recycled plastics in Japan.

(5)  Tax reform

Finally, with regard to taxation, in order to promote the spread of next-generation vehicles that contribute to carbon neutrality, we would like to request to avoid any system reform that leads to an increase in the burden on users, and consider tax reforms to accelerate the spread of these vehicles, and make auto-related taxes simplified with user burdens drastically reduced, as we have stated before.

The EBC Automobile Committee continues to support the EU and Japan’s goal of achieving a truly fair and open market.