Tesla: Leading the Pack
Tesla: Leading the Pack
Tesla has solidified its position as the market leader, with its market capitalization surpassing that of all other major automakers worldwide (approximately 50 companies combined). In other words, Tesla alone now accounts for more than half of the total market value of the global automotive industry.
Witnessing the rapid growth of Tesla and the Chinese electric vehicle (EV) market highlights significant challenges faced by Japan’s automotive industry. Below is a detailed analysis of the current state of Chinese EVs and the hurdles confronting Japan.
Global EV Sales Ranking (2023)
Rank Manufacturer Country Sales Volume (in 10,000 units) Notes
1st Tesla USA 174.9 Leading the market with technological innovation and brand power.
2nd BYD China 145.2 Expanding the market by balancing low cost and performance.
3rd VW (Volkswagen) Germany 73.2 Considering downsizing domestic factories.
4th GM USA 60.4
5th Geely China 47.8
6th Guangzhou Auto China 47.6 Pioneering autonomous driving technology.
16th Nissan Japan 13.3 Top Japanese manufacturer but underwhelming (low performance, poor cost-efficiency).
23rd Toyota Japan 8.7 Struggling to transition from internal combustion engines (low performance).
28th Honda Japan 1.9 Severely lagging behind (extremely low performance).
Challenges for Japanese Automakers
Japanese automakers have been slow to transition from an internal combustion engine development structure to EV-focused strategies. Nissan, Toyota, and Honda are significantly trailing behind Chinese manufacturers in EV sales.
Japan’s strict regulatory framework preserves outdated norms and stifles progress. Legal barriers hinder the collection of driving data and large-scale testing, resulting in stagnation in technological innovation.
As demand for autonomous vehicles rises in an aging society, the slow pace of adoption remains a critical issue. The planned merger of Honda and Nissan in August 2026 reflects an outdated pace, taking nearly three times longer than what’s typical for new economy companies.
Global Context: U.S. and EU Tariffs on Chinese EVs
The rapid growth of Chinese EV manufacturers has become a threat. In response, the U.S. and EU have imposed tariffs to buy time:
Region Measures Notes
USA Quadrupled tariffs on Chinese EVs (100%). Aimed at protecting domestic industries and maintaining competitiveness.
EU Increased tariffs from 10% to up to 45.3%. Intended to curb the expansion of Chinese EV market share.
China's Success and Japan’s Urgency
China’s EV market is dominating globally, backed by government support, innovation, and a well-developed testing environment. In contrast, Japan faces an urgent need to improve both its technology and regulatory landscape.
While the Honda-Nissan merger offers a chance for bold innovation, the future remains uncertain. Japanese industry leaders must stop merely criticizing China and instead learn from its successes. This will be key to revitalizing Japan's automotive industry.
The Boiling Earth and the Inevitable Shift
Aside from a few dissenters, like a certain "Tora-chan," most acknowledge the reality of a heating planet. The era of boiling Earth demands BEV (battery electric vehicle) adoption and MaaS (mobility as a service) transformation. A carbon tax also appears inevitable.
10 Key Conditions for Survival in the Automotive Industry
High-performance battery technology and cost reduction.
AI and autonomous driving capability at Levels 4–5.
Rationalization of manufacturing systems through robotics and higher in-house production rates (over 90%), reducing components and man-hours to less than one-sixth.
Improved vehicle utilization rates (e.g., robotaxi operation rising from 5% to at least 30%).
AI-powered MaaS management and dispatch systems for robotaxi infrastructure.
Enhanced total energy efficiency.
OTA (over-the-air) systems for real-time updates to maintain peak vehicle performance.
Satellite surveillance and communication systems for comprehensive road monitoring.
Seamless, high-performance charging station networks.
Low-cost maintenance systems and revenue generation models for vehicles, such as robotaxis earning money autonomously.
Failure to meet all these conditions will spell doom for automakers. New economy manufacturers are aggressively investing and moving at lightning speed, risking bankruptcy to achieve these goals.
In stark contrast, old economy manufacturers remain stagnant. Japan’s existing automakers, in particular, are slow-moving, self-congratulatory, and complacent.
A Grim Outlook for Japan’s Automotive Industry
I worry deeply about the future of Japan’s 5.58 million automotive workers. The outlook is especially dire for regions like Aichi Prefecture, where the economy is heavily dependent on the automotive industry.
The formula for Japan's decline: Semiconductors have dwindled to one-tenth of their former scale, and flat-screen TVs have also declined to about one-tenth of their peak. It's worrisome, but since Japan's leaders are people who neither reflect nor take responsibility, there is a high likelihood that the same mistakes will be repeated.