Japan is at risk of losing 1.72 million jobs and $6 billion in automotive profits by 2040 if the transition towards electric vehicle (EV) production does not move swiftly.
The country, considered the second-largest car exporter in the world, may risk having its GDP drop by 14% if it is not able to adapt.
Japan is at Risk of Losing a Lot if It Does Not Adapt
The news reportedly came from the Climate Group, which detailed the risks of what Japan is set to lose if it does not manage to adapt to circumstances. The group was founded in 2003 as a non-profit with the intent to help inspire action towards climate change.
The Climate Group initially commissioned two Japanese EV industry leaders to help with the report. The experts included Nissan Leaf's original design director and professor at the Institute of Design in Turin, Professor Masato Inoue, and Mitsubishi's head of i-MiEV project and the Japan Electrification Institute founder Kenishiro Wada.
Japan Lags Behind Compared to China, Europe, and the US When It Comes to EV Sales
According to the story by Electrek, Japan is behind when it comes to other markets like China, Europe, and the US when it comes to domestic EV sales.
The country still lags behind when it comes to battery-electric (BEV) and plug-in hybrid (PHEV) vehicle sales, while its domestic hybrid (HEV) sales has been going strong. The report shows that by 2030, major car markets are planning to either reduce or completely eliminate internal combustion engine vehicle sales.
The Country Made a Commitment to Join the International Climate Targets
Japan will also need to make drastic changes since it has committed to join with the international climate targets. As per Electrek, The Japanese economy is at risk if they won't be able to meet the targets.
A fifth of the country's exports are reportedly reliant on auto manufacturing and, as per experts, they could lose half of the exports if they fail to adapt. The article by Electrek states that the consequences could lead towards a loss of $6 billion in automotive profits and 1.72 million jobs through 2040.
In addition to that, the loss of exports and profits could lead to a GDP drop of a whopping 14%.
Different Targets Towards Electrification Within a 2030 to 2035 Timeframe
When it comes to other players, the EU has stated that by 2035, they will likely have new internal combustion engine (ICE) vehicles banned. Both China and the United States have stated that by 2035 and 2030, respectively, they want 50% of new car sales to include plugs.
Japan's commitment is towards the mid-2030s, which is the time the country plans to electrify all new cars with HEVs also included.
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Written by Urian B.
