Exclusive: After pressure from Toyota chief, Japan emphasized support for hybrids

TOKYO, June 24 (Reuters) – The head of Toyota Motor Corp (7203.T) has lobbied the Japanese government to make it clear that it supports hybrid vehicles as much as battery electrics or threatens to cut support from the auto industry losses, a senior lawmaker told a meeting of the ruling party.

The lobby of Akio Toyoda, president of Toyota and chair of the industry group Japan Automobile Manufacturers Association (JAMA), comes as the automaker is increasingly criticized by green investors who say it has been slow to embrace battery-electric vehicles and governments pressured to delay a transition to them. read more

Akira Amari, a former industry minister and a veteran member of the Liberal Democratic Party (LDP), called for changes to the government’s annual economic policy roadmap at a meeting on June 3, saying he had met a day earlier. Toyoda had spoken, according to notes and audio from the Reuters-reviewed meeting.

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The final version of the document included a reference to “so-called electric-powered vehicles” and appeared to put fossil fuel hybrids on par with zero-emission battery vehicles, although environmentalists say there is a huge difference.

“I spoke to Chairman Toyoda yesterday and he said JAMA cannot support a government that rejects hybrids,” Amari told the policy meeting of LDP lawmakers, according to the notes and audio.

Using synthetic fuel, such as from hydrogen, would make hybrid cars “100% clean energy” and the policy paper should make that explicit, Amari said.

“If we don’t make that clear, JAMA will push back with all our might,” Amari said according to the notes and audio.

“If we don’t say hybrids are included in the electric vehicle category, that doesn’t look good,” he said, adding that any reference to electric-powered vehicles should be changed to “so-called electric-powered vehicles.” †

Amari confirmed to Reuters that he requested the addition of “so-called” to clarify that electric vehicles were not limited to battery-electric vehicles and include hybrids. He said he didn’t ask for any other changes.

He confirmed that he had spoken to Toyoda.

“What Mr Toyoda is trying to say is that hybrids that run on synthetic fuels are good for the environment because they are extremely economical. He said he would be extremely displeased if hybrids were rejected. That’s what he told me. He asked if the LDP rejected hybrids and I said we didn’t do such a thing.”

Amari told Reuters that developing synthetic fuels could allow automakers to produce zero-emission internal combustion engines. Such fuels could also be used in aircraft, which cannot run on battery power, he said.

In a statement to Reuters, JAMA said the auto industry is doing everything it can to become carbon neutral by 2050. Since the goal was carbon neutrality, it was important to broaden the options and not be limited to specific technologies, it said.

It was also necessary to respond to different situations and customer needs in each country and region, it said.

A Toyota spokesperson referred Reuters to JAMA.

NO MORE FOOTNOTE

The final version of the document, available online, references Japan’s target of selling all new domestic cars as “so-called electric-powered vehicles” by 2035, and specifically states in the main text that such vehicles include hybrids.

An earlier version from May 31, also available online, shows the reference to hybrids only in a footnote. The main text refers to the 2035 target for all new car sales to be “electrically powered vehicles”.

The annual policy memorandum is of great importance to the government and serves as a framework for its future policy.

Toyota, the world’s largest automaker by sales, has said fossil fuels, not combustion engines, are the problem. In addition to the hybrids he popularized with the Prius more than two decades ago, he is also a proponent of hydrogen technology, although so far it hasn’t succeeded like battery-electric cars have.

Hybrids, including plug-in hybrids, accounted for nearly 44% of new passenger cars sold in Japan last year, while battery-powered electric vehicles accounted for less than 1%, according to data from the Japan Automobile Dealers Association.

This does not apply to mini cars, trucks or buses.

Energy and climate think tank InfluenceMap has rated Toyota as the worst of the major automakers for its climate policy advocacy work, including public statements and interaction with governments.

It has been criticized by its own investors, including pension funds, for its lobbying efforts. The Danish AkademikerPension sold most of its stake in Toyota last year.

Toyota pledged 8 trillion yen ($60 billion) last year to electrify its cars by 2030, half of which is slated to develop battery-electric vehicles. Still, it expects annual sales of such cars to reach just 3.5 million vehicles by the end of the decade, or about a third of current sales.

On Thursday, Toyota said it has recalled more than 2,000 of its first mass-produced electric car, the bZ4X SUV, less than two months after rolling out the vehicle, due to the risk that the wheel could come loose. read more

It says hybrids make sense in markets where the infrastructure isn’t ready to support a faster move to battery vehicles, and customers should have more choice for cleaner technology.

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Reporting by Makiko Yamazaki; Additional reporting by Nobuhiro Kubo, Maki Shiraki and Kaori Kaneko; Editing by David Dolan and Kim Coghill

Our Standards: The Thomson Reuters Trust Principles.

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