Leading the Green Charge

Japan's push for green-car dominance is also spilling over into the materials sector. Japanese steelmakers have for years been innovators in ultralight and high-strength steel. Toray, a carbon-fiber pioneer that provided material for the Boeing Dreamliner fuselage, is experimenting with making carbon fiber inexpensive enough for cars. High-tech materials some day could reduce the weight of a car by half. A superlight sports car produced by Ken Okuyama Design will soon start selling in Japan; the K.O 7, using carbon fiber and aluminum generously, weighs just 1,650 pounds. (The K.O 8 is still in the concept stage.)

Of course, by betting heavily on the green-car technologies, Japan could find itself with a bad hand. It's certainly missed forecasts in the past—when, for example, Japanese mobile-phone companies ended up backing the wrong standard in the early 1990s, largely shutting themselves out of the global cell-phone boom. The lithium-ion batteries that Japanese companies are investing in now have plenty of limits, and it's always possible that nimble non-Japanese entrepreneurs could figure out a better technology.

It's unclear which of the new technologies will triumph. Hydrogen-powered fuel-cell vehicles like Honda's Clarity face serious challenges because not only are they costly, but the fuel stations and infrastructure to power them would have to be built from the ground up. While electric vehicles are able to tap into existing power networks, they, too, remain costly, and even the best batteries don't offer the range of a full tank of gasoline. Lithium-ion batteries also have a tendency to overheat, potentially causing fires; some manufacturers have had to recall lithium-ion laptop batteries for just that reason. Don Hillebrand, director at Argonne National Labs in Chicago, warns: "This is a time of great potential and huge risk. Those leaders today may not stay leaders, because rules are going to change quickly."

Even the popular hybrids are still a niche product. But as far as Japanese carmakers are concerned, gasoline is no longer where the action is. Hillebrand believes that green technologies are changing the industry in an unprecedented way. If Ford invented modern car manufacturing when it built the first assembly line for the Model T, says Hillebrand, then the emerging green technology represents "the second invention of the auto industry." And right now, it's the Japanese who are leading the charge.

© 2008