[Initial Insight] It's Too Early to Be Confident About Surpassing Japanese Electric Cars

Japan's Electrification Slightly Delayed
Gap Narrowing Faster Than Expected
China's Imports Seven Times That of Korea

Toyota, the world's best-selling car manufacturer, faced humiliation last year. It released its first electric vehicle (EV) built on a dedicated platform, only to discover a defect where the wheels would come off. This was due to insufficient consideration of the EV's weight and acceleration.

Although the issue was quickly addressed with a recall, the company's reputation was tarnished. It was puzzling that Toyota, which had long applied motors and batteries to cars early on, was so late in launching a dedicated EV, and the quality was shoddy. Considering Toyota's usual emphasis on the monozukuri spirit (meaning to create the best product with wholehearted effort), this was an uncharacteristic outcome.

Many pointed to this incident as indicative of the recent situation facing Japanese EVs. Japan has a strong track record of developing excellent technology and delivering highly refined products. However, it often falls behind by stubbornly sticking to its own path, disconnected from global trends. This tendency to maintain a unique ecosystem isolated from the outside world has even been likened to the Gal?pagos Islands in South America.

Several years have passed since Tesla rose to prominence and numerous local Chinese manufacturers began releasing EVs, yet similar criticism has been directed at Japan's insistence on hybrids. Having achieved great success worldwide since the late 20th century with hybrid mass-production cars (such as the Toyota Prius), Japan was reluctant to relinquish its leadership in eco-friendly mobility technology and shift its focus to EVs.

Although Japan has belatedly caught up, few expect its strength to crumble easily. The gap is closing faster than anticipated. In the first half of this year, Japan's pure electric vehicle export value reached 436.3 billion yen, a 412% increase compared to the same period last year. While the volume is still not large, the growth rate is outstanding among major automobile exporting countries. For comparison, during the same period, China's EV export value growth rate was about 175%, Germany's about 113%, Tesla's home country the United States about 73%, and South Korea about 102% (based on data from the Korea International Trade Association and UN Comtrade).

Japan mainly exports EVs to countries where demand is rapidly increasing, such as the United States, the United Kingdom, the Netherlands, and Canada. Notably, China is a significant market. It is a market crowded with numerous local companies, where foreign EV brands other than Tesla find it difficult to gain a foothold. Among these, Germany, the United States, and then Japan are the largest importers of EVs.

Korean-made EVs account for only about 1% of the total EV imports, which is just one-seventh of the volume of Japanese-made EVs. Even this figure has increased considerably this year. Since the 2000s, China has become the world's largest finished car market, and its EV adoption rate is the fastest among major countries. Although China's economy has recently faltered significantly, it will be difficult to stand out in the future mobility market without achieving results in the Chinese market.

Technology trends related to mobility change daily. The world has learned that markets can rapidly shift at any time due to various external factors such as politics and trade. No one doubts that Japan, which has been sharpening its skills during a brief pause, will demonstrate its true capabilities. The question is when, and signs suggest it is arriving sooner than expected.

Japan was the first to introduce lithium-ion batteries, expected to complement or replace the 20th century's greatest engineering achievement?the power grid?and the first to launch mass-produced pure electric vehicles accessible to the public. Experience with being first can lead to complacency if mishandled, but if refined well, it becomes the nourishment for driving new changes. It is not the time to loosen the reins just because Japan briefly took the lead.

This content was produced with the assistance of AI translation services.