New Strategies Powering up Japan's Electric Vehicle Future
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New Strategies Powering up Japan's Electric Vehicle Future

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The worldwide electric vehicle market is expanding at such a rate that it has sent shock waves through the Japanese auto industry. According to Mordor Intelligence’s report, the size of the Japanese market for electric vehicle charging equipment is predicted to be $ 0.43 billion in 2023 and $ 1.06 billion by 2028, rising at a CAGR of 19.78 percent over the forecast period (2023-2028). In an effort to boost electrification, the EV charging infrastructure in Japan is anticipated to dramatically increase later this decade. Here are ways Japan is building an EV charging infrastructure that could position it on the global front.

Deploying EV Chargers Every 70 km along Highways

By 2030, operators would need to enhance the output of their fast chargers to at least 90 kW, according to new guidelines being introduced by the nation's ministry of economy, trade, and industry (METI).

The ministry emphasized that current fast chargers typically produce roughly 40 kW and take 30 minutes to fully charge a battery.

This effort by the ministry is believed to cover the cost of upgrading current chargers to ones that can deliver 90 kW in order to assist operators. In addition, the recommendations call for the installation of charges every 70 km along highways, following a similar European Union decision.

Billing is also said to be addressed, with pay-as-you-go solutions based on production volume expected to replace pricing based on charging time as the standard. This strategy, which is frequently employed in other nations, is one that METI wants to encourage.

Easing Government Rules in the Installation of EV Charging Stations

In an effort to accelerate the construction of the nation's charging infrastructure, Japan plans to alter rules governing the installation of fast electric vehicle charging stations. As a result, the Fire and Disaster Management Agency of the Japanese government, which is in charge of EV charging laws, intends to relax the restrictions governing charging stations with a capacity of more than 200kW.

Currently, charging stations that produce more than 200kW have to comply with strict safety regulations and are treated the same as electrical substations that handle high voltage currents.

Therefore, fire-resistant walls and ceilings are required to divide interior quick charging stations, and depending on the technology, there may be limitations on who is permitted to use the chargers.

 

Costs are greatly raised as a result. Reports claims that the cost of installing and operating rapid charging stations can reach tens of millions of yen ($75,000 is equal to 10 million yen).

Apartments to Have 150 Times More EV Chargers

In the upcoming years, the government of Tokyo, Japan, plans to significantly increase the number of electric vehicle chargers in its apartment complexes. It is mandating their installation while increasing incentives for developers to achieve this.

Tokyo will be the first city in Japan to mandate the inclusion of EV chargers in all new residential blocks beginning in 2025. All the new structures will have to provide charging at 20 percent of parking spaces.

The city's ultimate goal is to install 60,000 chargers in apartments by the year 2030. At the conclusion of fiscal year 2021, there were just 393 of them, a startling 150-fold rise.

The installation of more chargers in buildings will be a significant step in encouraging their adoption because around 70 percent of Tokyo's population lives in apartments (or other comparable housing complexes).

To fund this initiative for its 2023 budget, Tokyo has raised four billion yen ($29,248,640 at current exchange rates). It plans to install an additional 3,100 chargers at residential buildings throughout the city this year and the following year. About 15-fold increase from what was installed in 2022, on average.

Additionally, the Japanese national government provides incentives of 50 percent of EV charger costs (up to 350,000 yen/$2,559) and 100 percent of installation costs (up to 1.35 million yen/$9,871), and it is contemplating expanding that further in 2023.

In certain circumstances, this support, along with the incentives provided by Tokyo, could help developers cover all installation costs.

Electric vehicle adoption in Japan has lagged behind that in Europe, the US, and China, making infrastructure installation for them difficult to agree to for buildings.

Why was Japan Slow to Transition into EVs?

Now let's look at why Japanese automakers were slow to adopt the quick global transition to electric vehicles. Global sales of electric vehicles (including plug-in hybrids) made in Japan reached just under 120,000 units in 2020. The sum for both Nissan and Toyota is shown here.

No doubt, Japanese automakers were quick to introduce electric vehicles. With the i-MiEV, Mitsubishi led the way for electric vehicles in Japan in 2009. Nissan followed suit with the Leaf in 2010, and Toyota followed with the mid-sized SUV RAV4 EV in 2012. Therefore, it is not always the case that Japanese firms are coming late to the party. Instead, Japanese producers never increased their capacity for EV production.

This is due to the many years spent developing expertise in the production of internal combustion engines, an area in which Japanese automakers excel, as well as the Prius, which Toyota introduced in 1997, and other hybrid vehicles, which are fiercely competitive.

In addition, hybrids are now a major source of revenue for Japanese automakers because hybrid production facilities have reached their full depreciation rate. Therefore, it is undeniable that the high expenditures involved in creating a brand-new platform have discouraged companies from making investments in cutting-edge technology that would take years to pay off.

Furthermore, automakers in Japan are still skeptical of EVs owing to issues with setting up a charging infrastructure, problems with lithium-ion batteries' safety and cost, problems with range, and problems with the rare earths and conflict minerals imported from Africa and other places to make the motors and batteries that make up the bulk of EVs.

Finally, while the transition to electric vehicles themselves is frequently the focus in Japan, a more global perspective would place more emphasis on the CASE (connected cars, autonomous driving, sharing, and electrification) concept that is currently being adopted by the entire automotive industry.

However, the proposed changes, charging stations that produce 200kW or more would be treated the same as those that produce more than 50kW, which means they will still need to be placed a specific amount of distance from buildings.

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