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Just a few hours into the 2023 Japan Mobility Show, Honda’s chief executive had said he wanted to see the company’s logo in outer space. The head of Lexus had promised luxury cars with a sense of smell. The president of Subaru, from a great nebula of dry ice, had unveiled a conceptual flying car which may, eventually, fly.
The signs of stress are less subtle than they used to be. Too much talk of the future reveals a chasm in the present, and as such Japan’s biggest automotive trade show acts as a gauge of how hard the country’s once unstoppable carmakers are ready to fight for survival. Increasingly it looks like an industry waiting for a miracle.
The trillion-dollar question is whether solid-state batteries — a technology that promises greater range and safety than lithium-ion ones, and which Toyota has indicated it is near to mass producing — can be that miracle.
Although particularly visible at the Tokyo show this week — an event not held since 2019 — the underlying crisis is not the Japanese carmakers’ alone. The global legacy auto industry, of which Japan’s manufacturers comprise a still immensely powerful and successful segment, can see dangerous, historic and fundamental transformation ahead. They see it in the way cars are propelled, how they are built and the still unknowable role these rolling digital platforms will play in people’s lives.
Electric vehicles, of one type or another, look very much like the vanguard of that transformation and the upheaval around them is provably fertile ground for newcomers. Japanese carmakers, meanwhile, have collectively spent the past few years allowing themselves to appear ever further back from the evolutionary front line on EVs.
Toyota particularly so, given its long global supremacy as both innovator and competitor. Whatever the calculation behind its EV foot-dragging — it continues to believe that hybrids will have a critical role in the vehicle mix around the world — its laggard status on this is striking. The unflattering contrast with Tesla is obvious; the threat represented by China’s rapidly emerging legion of aggressively expansionist EV makers is probably the more unsettling.
And this is the disquiet into which the Japan Mobility Show — known for decades as the Tokyo Motor Show, but now retuned for worthier ESG times — has set up shop. In the relative absence of non-Japanese exhibitors, it has become the showcase of an auto industry desperately hoping that 100 per cent of its skills and experience will be relevant in this new world of upstarts and usurpers, but is increasingly resigned to the idea that the ratio might be far lower.
In that resignation, there is an unfamiliar decline in outward confidence. Japanese companies are certainly now building and designing EVs, but are doing so in a way that makes them look, in late 2023, more like challengers in a new industry than incumbents in one they have dominated for decades. That positioning may have suited Japan a half century ago when its then scrappier carmakers were unseating US and European rivals; it is not clear they are as suited in their more stately present.
But Toyota has an alternative narrative. It has not been on the back foot at all as Tesla and others have advanced and land-grabbed, but biding its time. It has been allowing the early days of the EV market to establish standards on pricing, range, charging time and reliability that it believes it can comfortably surpass. It envisages, in other words, a leap from laggard to leader on EVs. The fact that Toyota holds investment stakes in Subaru, Mazda, Suzuki and Isuzu suggests that, if successful, it may carry those others with it.
During this time-biding, runs the narrative, Toyota has been developing the solid-state battery that will make the laggard-to-leader leap possible, and is close to being able to mass produce the miracle. For all the doubts still swirling around this, investors clearly relish the story and are prepared to take the bet that it will work out. Toyota’s strategically timed progress updates on solid-state batteries have sent its shares to multi-decade highs, driving them up 47 per cent this year alone.
Without ever being an overt feature of Toyota or anyone else’s exhibit, the solid-state narrative was a permanent and powerful presence at the Japan Mobility Show. Few things define the country’s hopes for the future as neatly as this single technology and everything it could potentially carry with it, especially in an industry as central to the nation’s sense of itself as cars.
Ageing, shrinking and decreasingly competitive, Japan has left itself in need of a steady drip of technological miracles. It needs solid-state batteries more than anyone will admit.