EV sales lose steam as hybrids enjoy renaissanceーNHK WORLD-JAPAN NEWS

Happy Friday, we bring you the latest in business with BizPicks. We first look at the economic events in the week ahead. On Thursday, the Bank of Japan releases a summary of opinions from its monetary policy meeting this week. Investors will be looking for clues on when the BOJ may further raise interest rates in the year ahead. And on Friday, inflation data out of the US. The index that excludes food and energy is closely watched by the Federal Reserve. On the same day, the New York International Auto Show opens, so this week we focus on the latest trends in the auto industry. The market for electric vehicles has expanded rapidly in recent years, but there are signs the pace of growth is slowing. EV sales in the US during October to December last year increased slightly more than 1 percent, a sharp slowdown from the quarterly gains seen through 2023. As EV sales lose momentum, some automakers are rethinking their strategies. General Motors postponed the start of production at its electric vehicle plant in Michigan by one year, while Ford is delaying its $12 billion investment in the sector. We asked an auto industry analyst, Takaki Nakanishi, for his take on what's happening in the EV industry. The demand phase from early adopters who like to buy and try new technology is now coming to an end. The next customer base is people who buy products that offer practical benefits, but for them EVs are expensive and inconvenient as the recharging infrastructure isn't fully set up. Current EVs are also not attractive enough for those buyers. We may have to wait until 2026 for the arrival of more models that appeal to these consumers. EV sales will continue to increase, but the pace of the growth this year and next likely won't be as fast as recently seen. As EV sales move into the slow lane, demand is rebounding for hybrids that combine an internal combustion engine with an electric motor. Hybrid sales in the US last year surged 65% for the first gain in two years. These shifts reflect consumer tastes for vehicles that straddle the gap between conventional cars and EVs. Nakanishi says the trend is a boost for Japanese automakers. They have developed energy-saving hybrids, even while being criticized for lagging foreign counterparts in offering fully electric vehicles. Hybrids are profitable and offer significant cash flows to Japanese automakers. So they can leverage the benefits from hybrid sales to buy some time and catch up in next generation technology developments. I think it's a great opportunity for them. But Nakanishi notes that hybrids are likely to be just a transitional technology amid global efforts to decarbonize economies in the face of climate change. The drive to cut carbon emissions means automakers need to make their businesses sustainable for that environment. So they will definitely continue to promote development of electric vehicles. Hybrids are an excellent technology, but it's difficult to map the future with it. Nakanishi concludes that even though electric vehicle sales have hit a bumpy patch, they will eventually take a larger share of the global auto market. I'm John Ledu and that was this week's BizPicks.