The momentum in the global new energy vehicle industry is in a state of constant flux, and currently, pure electric vehicles are clearly leading the way, yet the market situation for other types of new energy vehicles has been rather unfavorable. In the current market competition, as the European automotive manufacturing industry is making desperate efforts at the last moment when European governments are preparing to introduce bans on the sale of fuel vehicles, in an attempt to prevent the dominance of pure electric vehicles. Germany, Italy, and other major European automotive countries are striving hard in this, but they have not yet achieved final success.
Elon Musk's Tesla has gained recognition beyond the initial skepticism of the global automotive manufacturing industry and has become a prominent player. The notable market success of Tesla's pure electric vehicles has influenced established companies like Ford Motor Company to make significant announcements. Ford has pledged to discontinue fuel vehicle production and proudly announced their partnership with Tesla. As part of this collaboration, Ford's vehicle models will be equipped with Tesla's fast charging devices and integrated into their network. It is apparent that Ford, as a traditional automaker, is willing to take the risk of aligning itself with Tesla and is embracing the era of electric vehicles.
Tesla has also achieved a significant capital return. According to the latest data from Bloomberg Billionaires Index on June 1, Musk reclaimed the title of the world's richest person with a net worth of USD 192 billion. This is not primarily derived from solid product manufacturing but rather through capital returns, which is the key difference between Musk and other conventional industries such as Toyota and BMW in terms of achieving returns. Indeed, he has taught industrial capitalists worldwide a lesson in capitalist philosophy.
The discourse on new energy vehicles has now become a major political issue worldwide, a topic that cannot be ignored. Everything from funding and returns to political support, policies, laws, restrictions, reputation, and branding is related to this primary issue. The trend of the European Union's restrictions on fuel vehicles is visible, and the United States is following a similar path. Governments at various levels, both nationally and internationally, have invested or are preparing to invest significant policy costs, which has already given certain visionary speculators a substantial advantage.
Recently, the French think tank France Stratégie released a report stating that the massive investments required for climate transition will slow down economic growth and increase public debt. This means that such a measure depends mainly on government policy operations. The report was commissioned by French Prime Minister Élisabeth Borne and written by economist Jean Pisani-Ferry. It emphasizes that 85% of decarbonization will be based on "the substitution of capital for fossil fuels". To achieve the 2030 target which is to reduce carbon emissions by 55% compared to 1990, "we will have to do in ten years what we have struggled to do in 30 years", the document stated.
According to the report, Selma Mahfouz, France's Inspector General of Finance, believes that decarbonization will require an additional annual investment of EUR 66 billion, which is almost equivalent to 50% of the total profits of the global automotive manufacturing industry. However, the investments required to mitigate global warming cannot improve output or efficiency; instead, they will initially lead to slower growth. The report points out that the additional costs of purchasing electric cars are currently not included in the national accounts because they are classified as "new products" different from the calculation method for fossil fuel engine vehicles. Therefore, in order to support households and businesses in meeting investment demands and coping with the inflationary effects of transition, "substantial efforts need to be made in public finances", leading to further increases in national debt. The report predicts that the risks posed by energy transition to public debt will account for approximately 10% of GDP by 2030 (equivalent to at least EUR 280 billion), 15% by 2035, and 25% by 2040. Clearly, the market for new energy vehicles is one that is driven by the government, and the global capital market is paying attention to this significant amount of money. Who will profit from it? Currently, it is undoubtedly Elon Musk, but it remains unclear who will be the future beneficiary.
Production and sales are two different aspects, and governments play a crucial role in the production side as well. For example, according to recent reports from Yonhap News Agency, the South Korean government has announced measures aimed at supporting the automotive parts industry, with a focus on three major tasks: promoting investment, training talent, and boosting exports. The South Korean government plans to invest over KRW 14.3 trillion in the automotive parts industry. By providing a platform for government-led initiatives, South Korea aims to secure orders and expand its electric vehicle production capacity to five times its current level by 2030. Additionally, they aim to increase exports of automotive parts to the two major markets, the United States and the European Union, as well as the potential markets of the Middle East, China, Japan, and ASEAN countries. The Ministry of Trade, Industry, and Energy of the country predicts that these measures will contribute to achieving a record-high export value of USD 80 billion for its automotive industry this year.
It is apparent that addressing climate change and the rise of new energy vehicles has led to a critical moment for the global automotive manufacturing industry. The question arises: what should be the future course of action for the industry? While there are numerous theoretical options that have been discussed on laboratory desks in the past, which one is the right choice, the one that truly carries a sense of historical responsibility? This is the question that this article seeks to address as an industrial policy.
I believe that there exists a "bipolar competition" in the global market for new energy vehicles. On one end, there is the clear dominance of pure electric vehicles under the Tesla model. On the other end, there is the hydrogen fuel cell vehicle trend, mainly driven by the Japanese automotive manufacturing industry. It is worth noting that the prospects for this end are uncertain, as it lacks substantial momentum and has not formed a significant market scale. Therefore, the current competition is effectively a situation where pure electric vehicle models have a significant lead.
From the perspective of industrial strategy in this context, it is still too early for Japanese car manufacturing companies to abandon hydrogen fuel cell vehicles and shift their focus back to manufacturing pure electric vehicles at this stage. In the face of fierce competition in the pure electric vehicle market, it is necessary for the Japanese business community to establish a supra-national industrial alliance based on hydrogen fuel cell-related technologies. Japanese companies should rely on this industrial alliance and freely release the majority of fuel cell-related technology patents while retaining some specific ones. The focus should then be on market scale, prioritizing the expansion of collaboration with governments worldwide through the industrial alliance to increase the market share and scale of hydrogen fuel cell vehicles, thereby establishing a relative advantage compared to pure electric vehicle models.
The purpose of this approach is to shift the strategic focus of hydrogen fuel cell vehicles from product manufacturing to seeking capital returns, using capital returns to support industry development. From the development trend of pure electric vehicles, Tesla has already been expanding its market share through price reductions, with the expectation that pure electric vehicles have the potential to surpass all other new energy vehicles in terms of technology. In this regard, establishing a supra-national industrial alliance for hydrogen fuel cell vehicles by freely opening patents could be the final industry window of opportunity for hydrogen fuel cell vehicles.
