It’s difficult to have a broad understanding of this. While we try to explain things simply, we must also think about how to respond to the criticism “Toyota doesn’t make BEVs, right?”

First, the discussion of electrification and ZEVs (Zero Emission Vehicles) has come to the forefront. The ZEVs were first developed in California to counter high pollution levels, as well as “a desire to decrease the amount of air-pollutants related to photochemical smog.” CO2 issues related to global warming were tacked on later. So, we must of course decrease the amount of CO2, but also create cars considering pollution issues. That is what a true ZEV is.

In fact, pollution and global warming are two separate issues. Doesn’t that mean we must solve both issues simultaneously?

Yes. I hope that in the end, all cars have zero emissions. However, I think we as a company must understand why it's so hard to make this an all-encompassing reality. If you look at the ranking of low CO2 emissions produced by each automaker as officially released by the European Commission in 2017, Toyota leads with the least. The y-axis is CO2 emissions in grams, and the x-axis is vehicle weight. Other companies are barely clearing recent regulations, and these regulations are only going to become stricter.

Yes, that makes sense.

For the past 17 years, Toyota has made the largest contribution to emission reductions. Other makers barely cleared the regulations. What does this mean? If I may be candid, having BEVs doesn’t guarantee good achievement rates for companies.

Toyota is a company that is said to be “late to the BEV game.”

That’s right. We currently (2019) don’t sell a single BEV. Regardless, we have the best achievement rate. Ultimately, because the customers are the ones choosing the car, I feel that this data is more the result of us thinking, “What is the kind of car that customers want to buy?” We provide BEVs because we naturally have the corporate responsibility to do so, but the majority of customers prefer to buy cars like HEVs that don’t require a special infrastructure and can be used normally, so they are in reality valued more.
For example, Toyota’s current position is if HEVs were converted to BEV sales would be equivalent to a little under 20 percent. Of course, if regulations become stricter in the future, for example, if by the year 2050 the regulatory rate becomes 80 percent or 90 percent, we’ll inevitably need zero emission cars, and everyone will have to work on them. However, realistically, we believe that HEVs are what customers will choose for the foreseeable future.

In other words, you’re saying that no matter how well environmentally friendly cars perform, they won’t contribute to the environment as long as they are merely featured in the catalogue [and not sold]. So, it’s important to have mass production cars that actually run on roads be eco-friendly. That’s what you mean when you say, “It’s only eco-friendly if it’s popular,” right?

Yes. I don’t mean to denigrate BEVs or FCEVs; it’s just that it’s going to take more time for customers to reach the point where they want to buy those cars, and, as a company, we have a responsibility to work on attracting more people, so there are steps that we can take in the meantime.

Even if you make a very attractive BEV, if the price point at which customers are willing to buy is lower than the cost, you will have to sell them at a tremendous markdown.

Exactly. The other thing is, what must we do to increase the number of people who would want to buy an BEV? Because of the price and the frequency of charging, I feel that it will still be some time before there is a major increase in interest.

I remember that data showing that there have been 3 million BEVs sold cumulatively worldwide, but Toyota has already sold almost 12 million HEVs. Is that right?

Actually it’s already over 13 million (as of Feb 2019).

It's amazing how popular they are. That’s why you are No. 1 in reducing CO2 emissions.

I’m not trying to make any major points, but when considering the standard for what customers want, we can’t say that the current BEV is something that many people will choose. I think it’ll take some time before BEVs becomes something people will readily choose. Of course, we must work hard on improving battery performance and lowering costs. We must avoid having no plan until we overcome the hurdles related to both BEVs and FCEVs. In the meantime, we can contribute by continuing our work on HEVs.

Another thing to consider is how different the infrastructures are depending on where you are in the world. For example, isn’t Toyota now conducting a demonstration experiment of a large FCEV truck at a port in Los Angeles? Since BEVs didn’t see success as shown by their low utilization rate, you were asked to make FCEVs. That was only possible because you were at a location where hydrogen could be regularly obtained. That was the best choice at that place, but that’s not always guaranteed to be the case. On the other hand, it’s possible to find places with similar conditions. As you know Mr. Terashi, even in Japan, there are industrial areas where by-product hydrogen, hydrogen generated naturally in the process of making industrial products, is available, and the surplus can be used to run cars without having to create hydrogen.

We believe that instead of switching everything to FCEV or BEV, it’s best to use what is most appropriate based on various energy situations.

Depending on the conditions of each location.

As you said, hydrogen is produced in many industrial complexes such as Kombinat. As such, for example, we can use a hydrogen-based infrastructure in this town. Alternatively, if hydropower is thriving, like in Norway, we can use some of the electricity generated for BEVs. Any surplus electricity can be converted to hydrogen and used for FCEVs. I think that the way we use energy changes depending on each location and that location’s characteristics.

So in other words, instead of one-sided or “all-in” thinking, there may be optimum power trains depending on the area; is that right?

I do believe that by around the year 2050, we will reach a final realistic answer by comparing different areas and their conditions, such as places with cheap electricity, places that generate a lot of hydrogen, and places with neither that may need a new approach.

It’s also very possible that the time axis will determine the infrastructure, moving from one situation to a different situation.

That’s also true, of course.