As the future of the automotive industry is heading toward electric vehicles (EV), Japanese automotive companies are bracing for change in their supply chain structure, which has been one of their primary competitive advantages. It remains uncertain whether and how the Japanese automotive industry can build new strength in the emerging EVs-dominant market. In the October issue of the RIETI Report, we present the column "Future of the Automotive Industry: Preparing for structural changes in the supply chain networks" by Faculty Fellow Nobuaki Hamaguchi.
Hamaguchi explains that Japan must follow suit in the EV market as world automobile market leaders are moving in that direction. For Japan, the pace of change is the focal point, and he feels that it is not imminent and there will still be some time. Hamaguchi then proposes some possible directions of development that the affected Japanese companies—which produce items that will be made unnecessary by EVs—can pursue. Finally, he stresses that is imperative for the automotive industry as a whole to continue to develop and drive the Japanese economy, and changes to the various regulatory and institutional systems as a result must be acceptable to consumers and the government and businesses must help develop innovative ideas.