By 2050 the central government aims to have all new cars sold in Japan be electric or hybrid vehicles, an economy ministry panel said Tuesday, amid intensifying competition in the global shift to green cars.
The panel, which included chiefs of major automakers such as Toyota Motor Corp., Nissan Motor Co. and Honda Motor Co. Ltd., also reported that a new industry organization will be set up by next March under which automakers will collaborate in the joint procurement of cobalt, an essential element involved in the manufacturing of electric car batteries.
The move comes as global carmakers race to lock in battery supplies and move away from traditional combustion engines, and as China locks down supply chains to secure its own quickly growing battery sector.
The ministry unveiled the plan at a committee set up to map out the country’s future in the auto industry. Together with automakers, it will discuss details of the new organization, which is designed to help battery users secure long-term supplies of cobalt and buy clean materials not associated with conflict minerals or child labor, it said.
Around half of global cobalt reserves are held by the Democratic Republic of Congo, presenting a volatile cocktail of political, operational and ethical risk.
“The new entity is aimed to disperse risks among battery users for securing cobalt supply which is dominated by DRC and at a time when growth rate of cobalt’s demand is still uncertain,” a government source said.
“Japanese battery-makers may also join the new scheme,” he said.
The joint body will try to secure supplies through signing long-term contracts with existing global suppliers or investing in new development projects with financial support coming from the government, he added.
Metals consultancy Roskill estimates cobalt demand at 310,000 tons by 2027, of which more than 240,000 tons will come from batteries used in electric vehicles, laptops and mobile phones. Roskill estimates cobalt demand last year was 118,000 tons.
Japanese trading houses and mining companies, in general, are also hesitant to heavily invest in cobalt projects since the mineral may become unnecessary should battery technology develop to provide alternatives.
But some companies have said they may consider investing if buyers make long-term purchase commitments.
Still, it is not clear how many Japanese companies will join the plan.
“We are aware of the move, but we have not decided to join the organization,” a source at a Japanese automaker said.
The panel, set up by the trade ministry in April to discuss ways to spread the use of electric vehicles, also set a target to reduce greenhouse gas emissions of a single passenger vehicle by 90 percent by 2050, compared with 2010 levels.
“Japan would like to contribute to achieve zero emissions on a global scale by spreading electric vehicles worldwide. That’s a goal only Japan, home to the top level of the auto industry, can set,” economy minister Hiroshige Seko said during the panel meeting.