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Electric-vehicle shift is chance to adapt: Honda R&D chief

Auto and parts makers will survive only with cooperation and agility, says Matsumoto

Honda R&D chief Yoshiyuki Matsumoto shows a concept for an autonomous, shared electric vehicle at the Consumer Electronics Show in Las Vegas this January.

TOKYO -- Electrification is rippling through the automotive world, with France and the U.K. moving to phase out fossil-fuel vehicles and China considering following suit. With the internal combustion engine sliding out of the spotlight, Yoshiyuki Matsumoto, president and CEO of Honda R&D, spoke with The Nikkei about this and other challenges from the shift toward electrification. Edited excerpts follow.

Expanding focus

Japan's auto parts makers must prepare for the shift toward electric cars, says Yoshiyuki Matsumoto of Honda.

Electric vehicles are the buzz of this year's International Motor Show in Frankfurt, Germany. There is a sense that the circumstances surrounding the auto industry have changed entirely. But looking more closely, plug-in hybrids and other green cars are part of the picture as well, even in regions said to be moving toward electrification. The conversation seems perhaps overly focused on electric vehicles alone.

Honda has said since before the electrification trend was apparent that we will make two-thirds of the cars we sell fully or partly electric by 2030 around the world, and by 2025 in Europe. We see conventional and plug-in hybrids comprising about half the total, with electric and fuel cell vehicles contributing 15%, and gasoline- or diesel-powered fossil fuel cars the remainder.

We judged these measures necessary based on global climate change countermeasures, such as those adopted by members of the United Nations Framework Convention on Climate Change. Looking at recent trends, we feel we have no need to rush, but the flow toward electrification is gaining momentum and we're finally at the implementation stage.

What has likely been an overdone shift toward electric vehicles may well need to be scaled back, given hurdles such as supply of storage batteries. But broadly speaking, it is certain that zero-emissions vehicles -- such as fuel cell ones -- will reliably continue to spread.

Staying unique

Some say electrification will make cars more into commodities, or render existing technologies and components obsolete. I would like to counter both of those points.

I believe much of the commoditization problem is mental -- automakers need a strong will to keep cars from becoming generic. Electric motors can be arranged with more freedom than combustion engines, and that will make it easier to branch out from the norm of front-wheel drive and make more four-wheel or rear-wheel drive vehicles. It should well be possible to capitalize on such unique features to keep making cars more enjoyable to drive and better designed.

For Honda's Clarity cars that we launched in the U.S. this year, we used the same platform for both the fuel cell and electric varieties. The cost-saving benefits were great, but from the standpoint of capitalizing on the unique points of electric vehicles, that approach left something to be desired. I would like for us to realize that goal better with some electric-only vehicles we have already announced plans for.

As for existing parts and technology, we will still be able to use what we've built up so far. Some say that making electric vehicles is simple as long as you have a battery and a motor, but fitting the vehicles to different environments around the world is no easy task. For example, heat generated by the battery and other parts needs to be managed. Japanese parts makers have built up heat management technology through the development of hybrid cars, and I believe that gives them a certain advantage.

Changing with the times

Lately, I've had more opportunities to visit auto parts makers. Hearing what they have to say, it's quite clear they're working behind the scenes in various ways to prepare for electrification. Most likely the companies that are nimblest and most adaptable, not necessarily strongest, will survive -- similar to Darwin's theory of evolution. Preparations are proceeding, and these companies are not pessimistic about the transition.

But simply building in a straight line from existing ideas will not be enough. With the spread of electric vehicles -- and fuel cell ones, which share many of the same parts -- cars will become more enmeshed with the power grid and other electrical infrastructure. With storage and fuel cell batteries, cars can likely take on new roles in storing and supplying energy. Entering a time when Europe will have solar and other renewable energy to spare, there is great need for autos to play such roles.

More and more companies will likely come to treat cars as part of a new ecosystem. Realizing that model will likely bring great change to production structures. Automakers will have a chance to greatly expand their scopes of expertise.

Automakers have always fought to improve their internal combustion engines, but that is no longer enough. It will become more important to cooperate with other companies and strive toward standardization in areas such as construction of infrastructure. A willingness to join hands where possible will likely be critical.

Japanese manufacturers' strength lies in skills such as honing ideas via cooperation and compromise. To lose that would be to lose everything. I believe the path forward for Japanese automakers in the electric-vehicle era is to use our strength to expand our business into creating possibilities as well as products.

Interviewed by Nikkei senior staff writer Kazuyuki Okudaira

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