The transportation sector is responsible for around 20 percent of all carbon dioxide (CO2) emissions in Japan. Of this amount, vehicles are responsible for producing a very high 90 percent. While CO2 emissions from trucks have been falling, emissions from passenger cars have increased considerably by around 45 percent over the base year (fiscal 1990). To reduce CO2 emissions from the transport sector, therefore, it is imperative that we reduce such emissions from passenger cars.
There are four approaches to reducing CO2 emissions from passenger cars, namely, (1) reducing the demand for travel, (2) switching to low-emission means of transport, (3) reducing CO2 emissions from cars that are already on the road and (4) reducing CO2 emissions from new cars (improved fuel economy). To realize Item (3), the application of eco-driving and the use of biofuels have been promoted, while for Item (4), electrification of the powertrain (engine and transmission), i.e., electric drive vehicles, is attracting attention.
Electric drive vehicles can be broadly divided into three types depending on the degree of electrification. Specifically, they are hybrid electric vehicles (HEVs), plug-in HEVs (PHEVs) and electric vehicles (EVs). In particular, EVs, which produce zero CO2 emissions on the road, have become the focus of attention over the last one to two years. However, the high price of such vehicles (especially the expensive rechargeable batteries) as well as problems such as the lack of a well-developed charging infrastructure means that HEVs will most likely become the mainstream of electric drive vehicles over the next ten years.
As a means of reducing CO2 emissions in the transportation sector, it is probably unreasonable to expect too much of EVs. Nevertheless, with innovation in terms of technologies and business models, there is a good chance that the market for EVs will expand. If, for example, the application of new business models such as the reuse of used EV batteries and EV car sharing can result in a drop in the price of EVs, the market for EVs would expand, making a significant contribution to reducing CO2 emissions from passenger cars.