The year 2024 was a year of upheaval, with news of the business merger between Nissan and Honda coming from stalled EV sales.

Just as the auto industry was getting over the woes of the Corona disaster, it faces major challenges in securing costs, energy, and resources in the wake of Russia’s invasion of Ukraine. Global automakers, especially European automakers, which have been investing heavily in the rapid shift to BEVs, continue to face a combination of factors, including a lull in BEV demand, the rise of emerging BEV manufacturers, challenges in battery technology and supply, inflation due to geopolitical tensions, and the negative effects of their traditionally high cost structure and excess production capacity. The situation continues to be difficult.

On the other hand, the policy of aiming for carbon neutrality throughout the entire value chain, with a focus on BEVs over the long term, remains largely unchanged. All companies intend to maintain their product development for the time being, using both internal combustion engine and electric vehicle technologies, and the dominance of Japanese companies with strong HEV technologies may continue for some time. While there are concerns about the impact on earnings from an increase in BEVs with high battery costs, digital services that can be fully deployed by converting cars to SDVs (incorporating various functions into in-vehicle systems through OTA, upgrading vehicle hardware technologies such as E-drive, and adding automatic driving functions, etc.) are expected to contribute to earnings. The expansion of these services is expected to contribute to earnings. Major automotive companies are generally preparing their development systems for the shift to SDV and developing software-defined next-generation BEV architectures, but there are noticeable delays in their development.

Speaking of Honda, the Eco-Mileage Challenge, a fuel-efficiency competition that the company has sponsored since 1981, is a vehicle powered by Honda’s naturally aspirated 4-stroke gasoline engine (50cc or 150cc) that competes in terms of cruising range per liter. Fuel economy in the competition has already reached nearly 300 km/L in the first competition, and in 2011, it surpassed 3,600 km/L (the highest record in the competition was 3,645 km/L). Furthermore, in 2024, a new class that uses carbon-neutral fuel will be established in an effort to decarbonize the competition.

While there are factors such as vehicle weight reduction and tire rolling resistance, we see the potential for further evolution of automobile engine and liquid fuel technologies. Honda, the organizer of the event, has publicly stated that it will sell 100% ZEVs globally by 2040, and there are signs that the evolution of engines and liquid fuels will continue, as evidenced by its participation in F1 after 2026, which requires a CNF-compatible ultra-efficient engine, and its demonstration tests of CNF in the Super Taikyu race in Japan.