Beyond the gasoline era

by Takamitsu Sawa

Mitsubishi Motors will start selling its new battery-powered car dubbed “iMiEV” in Japan this coming July while Nissan Motor plans to follow suit next year. Toyota Motor, meanwhile, says it will launch a plug-in hybrid vehicle sometime in the “early 2010s.” I agree with Nissan President Carlos Ghosn, who says he is convinced that by around 2030, there will no longer be any motor vehicles powered solely by gasoline engines.

According to the information published on Mitsubishi’s Web site, the iMiEV’s lithium-ion battery can be charged within seven hours using a 200-volt power source or in 14 hours with a 100-volt source to its full capacity of 16 kilowatt-hours. Since the car runs 10 km for each kilowatt-hour of power it consumes, the fully charged battery will have the capacity to power the vehicle for 160 km. However, the running distance may be shortened if a certain portion of the power is used to operate accessories such as an air-conditioner. The maximum speed of the car is given as 130 kph, comparable to a vehicle powered by a small gasoline engine.

A conventional car of the size similar to that of the iMiEV runs an average 15.5 kilometers per liter of gasoline. Assuming that gasoline sells for ¥105 per liter and the fee for charging the battery during nighttime is ¥7 per kilowatt-hour, the cost of driving the battery car for 10 km will be ¥7, whereas the comparable cost for the gasoline engine vehicle will be ¥68.

In terms of the emission of carbon dioxide, generating one kilowatt-hour of electricity under the prevailing system emits 425 grams of CO2, while 2,320 grams of CO2 are emitted by burning one liter of gasoline. In other words, a battery car will emit 425 grams of CO2 by running 10 km, compared with 1,497 grams for a gasoline engine vehicle. It follows, therefore, that should a gasoline engine vehicle be replaced by an electric car, the CO2 emission will be reduced by 72 percent. Assuming each vehicle is driven for 10,000 kilometers per year, use of a battery car means a reduction of ¥61,000 in fuel cost and a reduction of 1,072 kg in CO2 emission. Since privately owned passenger cars today account for 6 percent of the nation’s total CO2 emission, the replacement of all such cars with battery cars would reduce the total emission by 4.3 percent. It should be noted that all these statistics are based on specification figures given for the mini-size iMiEV.

How much will the demand for electricity increase if all of the 74.1 million passenger cars registered in Japan as of the end of fiscal 2006 were to be replaced by battery vehicles? Based on the statistics mentioned above, the increase would be 74.1 billion kilowatt-hours, which is equivalent to only 12.8 percent of the total power sales of 580 billion kilowatt-hours recorded in fiscal 2007. If the price of crude oil is to soar to more than $200 per barrel by 2030, as is forecast by the International Energy Agency, there is every reason to encourage replacement of gasoline engines with batteries from the standpoint of ensuring Japan’s security in energy supply.

Nevertheless, there are still a number of shortcomings related to battery cars and plug-in hybrid vehicles. One is the high price of lithium-ion batteries, which makes electric vehicles far less competitive than conventional gasoline engine cars. Even if the cost of running a battery car is ¥60,000 less per year than the cost for running a gasoline car, the saving would come only to ¥600,000 over a period of 10 years, making it impossible to recover the high purchasing price. It follows, therefore, that a battery car or a plug-in hybrid vehicle will remain a luxury item beyond the reach of ordinary car buyers unless the government promotes a tax break or other forms of incentive.

In 1975, the percentage of households in Japan owning passenger cars reached 40 percent of the total, and the figure kept rising to reach 80 percent in 1991. Since then, however, it has remained short of 90 percent. This means that 10 percent or more of all households refuse to own cars as a matter of principle or because they cannot afford to pay the running costs.

In Japan, anyone who possesses a car has to pay an ownership tax, insurance premium and a parking charge (if they don’t own a space). Moreover, every passenger car is subject to vehicle inspection every two years following its initial three-year registration period. For some people, especially those living in congested major urban areas with good public transportation, automobile ownership is not worth these costs. As a result, car are used primarily by housewives for shopping and taking children to school, and for outings during the summer and winter vacation seasons.

On the other hand, privately owned vehicles are an important means of transportation for those living in rural areas, where public transportation systems are not well developed and roads are usually not too congested. Public transportation systems cannot survive in rural areas unless there is a certain degree of concentration of population, as has been proven by the abolition of deficit-ridden local railway lines operated by the now-defunct Japanese National Railways.

This has given rise to the “compact city” initiative, which, for example, would restructure a municipality of 10,000 people into three core areas. Within each of the core areas, the people can move either on foot or by bicycle, while the areas are connected with each other by a “light rail transit” system. This is my proposal for building a society with no need for automobiles.

Takamitsu Sawa is professor at Ritsumeikan University’s Graduate School of Policy Science and specially appointed professor at Kyoto University’s Institute of Economic Research.