Navigant Research Blog

Japan Moves to Become PEV Leader

Lisa Jerram — August 8, 2013

As of today, the two biggest plug-in electric vehicle (PEV) markets in the world are the United States and Japan.  (China is close behind.)  Both countries have enjoyed central government support for PEV purchases and EV charging deployments.  Both are top markets for hybrid vehicle sales, which indicate the right demographics for interest in higher-priced, green, and high-tech cars.   Both countries also have domestic automakers leading the way in EV research and development (R&D). These automakers are therefore anxious to promote their technology in their home markets.  Nevertheless, in each country, PEVs are viewed by some advocates and by the government as having under-performed in the market so far – a perception that Navigant has argued is inaccurate.

In response to this concern, Japan’s automakers announced in July  that they will join together to significantly expand EV charging station deployments in Japan.  Currently, Japan has around 1,700 fast chargers and 3,000 public AC chargers.  The automakers agreed to cooperate to install 12,000 charging stations: 4,000 fast chargers and 8,000 regular AC chargers.  This effort will be supported by an astonishing 100 billion yen ($1 billion) from the Japanese government.

This announcement demonstrates the advantages that Japan has over the United States in creating an environment where PEVs could capture a significant share of light duty vehicle sales.  For one thing, the sheer geographic size of the U.S. makes it extremely difficult to provide full charging coverage for PEV drivers.  Even if the U.S. government were inclined to make more money available for large-scale EV charging equipment deployments, as a practical matter, it would cost billions to make major metropolitan areas across the U.S. truly EV ready.

In It Together

Second, Japan has the advantage of a more cooperative attitude among its automakers, who appear to have decided that they will rise or fall together in the PEV market.  U.S. automakers are not on the same page regarding plug-in technology – Chrysler, for example, has not  strongly committed to battery vehicles – so are not inclined to support a major collective effort to install chargers.  Third, Japan made an early commitment to a DC charging standard. As Navigant noted in its DC Fast Charging Equipment report, this allowed fast charging deployments to proliferate while the United States continued to debate its own standard. This new subsidy program for DC charging should further entrench the CHAdeMO standard in Japan.

The new charging stations will be installed at restaurants, retail sites, gas stations, and along major highways across Japan.  The automakers did not provide a timeline for the infrastructure rollout.  Automakers will promote collaboration among their respective charging networks, addressing another hindrance to the market: lack of network interoperability.

This program will serve as an interesting experiment on the “chicken and egg” question.  Clearly, the Japanese automakers have concluded that PEVs, which right now account for less than 2% of Japan’s car sales, will not see significant market penetration without the widespread availability of public charging.  The bigger issue for PEVs right now is the significant price premium, coupled with the limitations of range and charge time.  An extensive network of charging stations can help address these issues to some degree by allowing OEMs to incorporate smaller batteries (since drivers will be able to recharge more readily), reducing the prices of their cars.

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