Executive Briefings

As Electric Cars’ Prospects Brighten, Japan Fears Being Left Behind

At a factory near the base of Mount Fuji, workers painstakingly assemble transmissions for some of the world’s top-selling cars. The expensive, complex components, and the workers’ jobs, could be obsolete in a couple of decades.

The threat: battery-powered electric vehicles.

Their designs do away with the belts and gears of a transmission, as well as thousands of other parts used in conventional cars. Established suppliers are nervous, especially in Japan, where automaking is a pillar of the economy — and where industrial giants have been previously left behind by technological change.

“If the world went all-E.V. today, it would kill my business,” said Terry Nakatsuka, chief executive of Jatco, the company that owns the transmission factory, using a shorthand term for electric vehicles.

With 7,000 workers, Jatco is part of a vast ecosystem of carmakers and suppliers that provides one in 10 Japanese jobs, accounts for a fifth of national exports and generates more profit than any other industry in Japan.

Japan is scrambling to ensure it has a future in an electric-car world. Toyota, the country’s largest automaker, pioneered gasoline-electric hybrids but has long been skeptical about consumers’ appetite for cars that run on batteries alone. Now, under pressure from foreign rivals like Tesla, the company says it is developing a batch of new electric models.

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The threat: battery-powered electric vehicles.

Their designs do away with the belts and gears of a transmission, as well as thousands of other parts used in conventional cars. Established suppliers are nervous, especially in Japan, where automaking is a pillar of the economy — and where industrial giants have been previously left behind by technological change.

“If the world went all-E.V. today, it would kill my business,” said Terry Nakatsuka, chief executive of Jatco, the company that owns the transmission factory, using a shorthand term for electric vehicles.

With 7,000 workers, Jatco is part of a vast ecosystem of carmakers and suppliers that provides one in 10 Japanese jobs, accounts for a fifth of national exports and generates more profit than any other industry in Japan.

Japan is scrambling to ensure it has a future in an electric-car world. Toyota, the country’s largest automaker, pioneered gasoline-electric hybrids but has long been skeptical about consumers’ appetite for cars that run on batteries alone. Now, under pressure from foreign rivals like Tesla, the company says it is developing a batch of new electric models.

Read Full Article