Japan to Phase Out Gasoline-Powered Cars, Bucking Toyota Chief

Japan would still permit the sale of hybrid gas-electric cars after 2035 under the plan. Many models from Japan’s top car makers—Toyota, Honda Motor Co. and Nissan Motor Co. —come in both traditional and hybrid versions.

Earlier this month, Toyota President Akio Toyoda said that if Japan was too hasty in banning gasoline-powered cars and moving to electric vehicles, “the current business model of the car industry is going to collapse.” He was speaking on behalf of Japanese car makers in his role as head of a local industry association.

Mr. Toyoda said the electricity grid couldn’t handle extra summer demand and observed that most of Japan’s electricity is generated by burning fossil fuels.

Government officials said converting to cleaner energy and electric-powered vehicles should be treated as an opportunity for growth.

“The age has ended when we could view the response to global warming as a cost or limitation on economic growth,” said Katsunobu Kato, a government minister who led the council putting together the plan. “What is demanded of the private sector is a significant change in existing strategies and business models.”

The government plan calls for all new cars sold in Japan from the mid-2030s onward to be electrified. That includes electric vehicles, hybrid gas-electric models and cars whose electricity is generated by hydrogen fuel cells. The plan says the cost of batteries should be reduced so that electric vehicles cost about the same as gasoline-powered vehicles a decade from now.

A plan outline released by the Ministry of Economy, Trade and Industry expressed concern that Europe and China were jumping ahead of Japan. It observed that sales of EVs and plug-in hybrid vehicles more than tripled in the European Union in the July-September quarter to around 270,000 units, while the equivalent figure for Japan was only about 6,000.

Masayoshi Arai, a ministry official, said “Japan is very far behind” on vehicle electrification.

Japanese auto executives bristle at such statements, saying more hybrid gas-electric vehicles are sold in Japan than in any other country. Some question whether fully electric vehicles such as those made by Tesla Inc. are more environmentally friendly than hybrids given the carbon dioxide emitted in producing EVs and their parts.

“It is absolutely not the case that Japan is behind,” said Toshihiro Mibe, a Honda executive who heads an industry council on environmental technology.

Write to Peter Landers at [email protected] and Chieko Tsuneoka at [email protected]