In recent years, the automotive industry has entered what is called a once-in-a-century transformation period. At the center of this transformation is "electrification," particularly the proliferation of battery electric vehicles (BEVs). However, since the inauguration of the Trump administration, the previous trends regarding environmental investment and environmental regulations are approaching a major turning point. Some even point out that BEVs themselves are becoming "obsolete." Is this really true? Looking at sales data from countries around the world, there are no facts that would suggest the electrification of automobiles, particularly the shift to BEVs, has completely ended. Rather, it appears highly likely that progress is steadily advancing toward a certain penetration limit. This paper will organize sales trends in China, the United States, Germany, and Thailand, an emerging market of note in Southeast Asia, and consider the impact on Japan's automotive industry.
 

China: The World's Largest EV Market, with BEVs Already Accounting for 30% of New Cars

　The first point to note in the opening graph is China (left chart). China's automotive market boasts the world's largest scale, and within it, the ratio of BEVs has already reached approximately 30% of new car sales. This is backed by the government's strong subsidy policies, rapid development of charging infrastructure, and aggressive product deployment by local manufacturers such as BYD and NIO. China's characteristic feature is its transition from "policy-driven demand stimulation" to "market-principle-based selection." Initially, price advantages through subsidies drove consumer purchases, but now vehicle performance and price competitiveness themselves have become the central reasons for purchase. This transition contains important implications for Japanese manufacturers as well. Namely, the reality that "consumers will choose BEVs even without subsidies if performance and price are balanced."

※On the other hand, some reports suggest that BYD has fallen into overproduction and may face difficult business conditions going forward. It will be necessary to closely monitor BYD's future developments regarding this matter.
 

United States: From Temporary Stagnation to Growth Again

Next, let's examine data from the United States, the epicenter of the Trump shock (right chart). After the Trump administration took office, sales indeed temporarily declined due to the effects of environmental deregulation and gasoline vehicle preferential policies. However, subsequently, with Tesla's production capacity expansion and the introduction of new EVs by GM and Ford, the trend has returned to growth. What should be noted is the "gradual increase" trend. Due to the vast national territory, American consumers are sensitive to driving range and charging infrastructure, making it difficult to shift rapidly to EVs. However, in states with strict environmental regulations such as California, the EV ratio is already approaching 20%, revealing a uniquely American structure of "fragmented adoption by state." American homes are blessed with charging environments, and the lifestyle of using vehicles for commuting and charging at night may be far more suited to BEVs than Japan.

Germany: Gradual Rise Even After Policy Adjustments

Next, let's examine Europe from the above graph. Germany, Europe's central country, initially promoted BEVs strongly as a "leader in decarbonization." However, it is also true that policy slowdowns were observed due to factors such as excessive expectations, delays in infrastructure development, and rising electricity costs. Nevertheless, due to consumer environmental awareness and the presence of EU-wide emission regulations, the BEV ratio is again gradually rising. This can be said to be a typical example of "rapid proliferation is difficult, but EVs will secure a certain market share in the long term."

Japanese manufacturers need to face the reality that "while policy-dependent rapid expansion carries risks, EV ratios will not decline as long as the regulatory environment continues."

Thailand: Rapidly Growing BEVs in an Emerging Market

 Particularly noteworthy is Thailand in Southeast Asia (right chart above). While the centers of the automotive industry have traditionally been North America, Europe, and China, Thailand is now emerging as a "new EV market." In Thailand, Chinese manufacturers such as BYD and Geely have successively started local production. While this is partly due to moves to export excess production from mainland China, the Thai government's own strategic efforts to foster the EV industry cannot be overlooked. Local sales volumes are already surging, and electrification ratios may rise rapidly over the next few years. If Thailand grows as "Southeast Asia's EV hub," the competitive environment in the ASEAN market would completely change for Japanese manufacturers. Southeast Asia has been called the "impregnable fortress" of Japan's automotive industry, a monopolistic market where Japanese cars occupy over 90% market share. However, that stronghold is now being eroded.

Implications for Japan's Automotive Industry

Based on the trends outlined above, the lessons for Japan's automotive industry are clear.
 

1. BEVs are not a "temporary boom" but will expand to a certain penetration limit.
   Globally, BEV market share is likely to reach around 20%. While this will not completely displace internal combustion engines, it represents a market scale that cannot be ignored.
2. Neglecting innovation risks being undermined by "obsolescence theories."
   If Japanese manufacturers assume BEVs will not become dominant and neglect technology development and market introduction, they risk rapidly losing competitiveness.
3. Prepare for Chinese competitors' offensive in emerging markets.
   Chinese manufacturers are accelerating global expansion using Southeast Asia as a stepping stone. The developments in Thailand are typical of this. Japanese companies need to counter not only through price and performance but also through local production and service network development.

Conclusion: Realistic Strategies Considering Penetration Limits

A future where electric vehicles dominate all global automotive markets will not arrive in the near term, at least. However, our analysis predicts a high possibility that BEV penetration will advance to a certain level (around 20% global average market share). How to interpret this "limited penetration scenario" and reflect it in product strategies and investment allocation will determine the fate of Japan's automotive industry. It is easy to dismiss "BEVs as obsolete." However, this is a dangerous judgment that misreads reality. Rather, the stance that Japan's automotive industry should take is a realistic strategy of "not resting on obsolescence theories, but reliably securing necessary technologies and markets while eyeing penetration limits."