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Exclusive: Japan emphasised hybrids in policy document after lawmaker cited lobbying from Toyota head

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© Reuters. FILE PHOTO: Toyota Motor Corporation President Akio Toyoda speaks at a briefing on the company’s strategies on battery EVs in Tokyo, Japan December 14, 2021. REUTERS/Kim Kyung-Hoon

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By Makiko Yamazaki

TOKYO (Reuters) – Japan changed a key policy document to show its support for hybrids was on par with battery-electric vehicles after a lawmaker cited the head of Toyota saying automakers couldn’t back a government that rejected the technology popularised by the Prius, according to notes from a ruling party meeting.

The wording changes, which included adding a reference to “so-called electric-powered vehicles”, appear to put fossil-fuel burning hybrids on equal footing with zero-emission battery vehicles, even though environmentalists say there is a vast difference.

Japan’s auto industry, particularly Toyota Motor (NYSE:TM) Corp, has come under pressure from environmentalists and green investors who say it has been slow to embrace battery-electric vehicles and lobbied governments to undermine a transition to them.

Akira Amari, a former industry minister and a veteran member of the Liberal Democratic Party (LDP), requested the change to the government’s annual economic policy roadmap at a June 3 meeting, saying he had spoken with Akio Toyoda a day earlier, according to the notes and audio reviewed by Reuters.

Toyoda is both chairman of the Japanese Automobile Manufacturers Association (JAMA) lobby and president of Toyota.

“I spoke with Chairman Toyoda yesterday and he said that JAMA cannot endorse a government that rejects hybrids,” Amari told the policy meeting of LDP lawmakers, according to the notes and audio.

Use of synthetic fuel, such as from hydrogen, would make hybrids “100% clean energy” cars and the policy document should make that explicit, Amari said.

“If we don’t make that clear, JAMA will push back with all its might,” Amari said, according to the notes and audio.

“If we don’t say that hybrids are included in the category of electric vehicles, that won’t look good,” he said, adding that a reference to electric-powered vehicles should be changed to “so-called electric-powered vehicles”.

Amari confirmed to Reuters that he asked for the inclusion of “so-called” to make clear that electric vehicles were not limited to battery-electric vehicles and included hybrids. He said he asked for no other changes.

He confirmed that he had spoken to Toyoda.

“What Mr. Toyoda is trying to say is that hybrids running with synthetic fuels are good for the environment because they are extremely fuel efficient. He said he would be extremely unsatisfied if hybrids were rejected. That’s what he told me. He asked if the LDP were rejecting hybrids and I said that we were doing no such thing.”

Amari told Reuters that by developing synthetic fuels automakers would be able to produce zero-emissions internal combustion engines. Such fuels could also be used in aircraft, which can’t run on battery power, he said.

In a statement to Reuters, JAMA said the auto industry was making every effort toward its goal of becoming carbon neutral by 2050. Since the goal was carbon neutrality, it was important to broaden options and not be limited to specific technologies, it said.

It was also necessary to respond to various situations and customer needs in each country and region, it said.

A Toyota spokesperson referred Reuters to JAMA.

A FOOTNOTE

The final version of the document, available online, refers to Japan’s 2035 target of all new domestic car sales being “so-called electric-powered vehicles,” and specifically mentions in the main text that such vehicles include hybrids.

An earlier draft from May 31, also available online, shows the reference to hybrids only in a footnote. The main text refers to the 2035 target as having all new car sales being “electric-powered vehicles”.

The annual policy document is of major importance for the government and serves as a framework for its future policy.

Toyota, the world’s biggest automaker by sales, has said fossil fuels, not internal combustion engines, are the problem. As well as the hybrids it popularised more than two decades ago with the Prius, it also champions hydrogen technology, although that has so far not caught on the way battery-electric cars have.

Energy and climate think-tank InfluenceMap has rated Toyota the worst among major automakers for its lobbying record on climate policy, which includes public statements and interaction with governments.

It has been criticised by its own investors, including pension funds, over its lobbying. Denmark’s AkademikerPension has sold down most of its stake in Toyota over the last year.

Toyota last year committed 8 trillion yen ($60 billion) to electrify its cars by 2030, with half of that slated to develop battery electric vehicles. Still, it expects annual sales of such cars to reach only 3.5 million vehicles by the end of the decade, or around a third of current sales.

It says hybrids make sense in markets where infrastructure isn’t ready to support a faster move to battery vehicles, and that customers should have more choices for cleaner technology.

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China Evergrande says winding-up lawsuit won’t impact restructuring

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© Reuters. The Evergrande Center of China Evergrande Group is seen amid other buildings in Shanghai, China, September 24, 2021. REUTERS/Aly Song

By Clare Jim and Sameer Manekar

Hong Kong (Reuters) -China Evergrande Group, the world’s most indebted property developer, on Tuesday said it will “vigorously” oppose a winding-up lawsuit filed against it, and that the petition will not impact its restructuring plan or timetable.

Evergrande confirmed the filing by investment holding firm Top Shine Global Ltd in Hong Kong for not fulfilling a financial obligation of HK$862.5 million ($109.91 million).

The developer has over $300 billion in liabilities and defaulted on its offshore debt last year. It expects to announce a preliminary restructuring plan by the end of July.

In a stock exchange filing on Tuesday, it said, if wound up, any disposition of property directly held, including assets and shares, will be void unless the court grants a validation order.

In such a scenario, it said, any transfer of shares by shareholders or potential investors on or after June 24, when the petition was filed, would be void.

Trading of Evergrande shares has been suspended since March 21 as the firm was unable to publish financial results on time, and because unit Evergrande Property Services Group Ltd said it was is investigating how banks seized 13.4 billion yuan ($2.00 billion) in deposits that had been pledged as security for third-party guarantees.

On Monday, a Top Shine executive told Reuters his firm filed the petition because Evergrande had not honoured an agreement to repurchase shares it bought in Fangchebao (FCB), Evergrande’s online real estate and automobile marketplace.

The executive said Top Shine bought 0.46% of FCB for HK$750 million in March last year ahead of an initial public offering (IPO), and that Evergrande agreed to repurchase the shares with a 15% premium if an IPO did not materialise by April 8, 2022.

($1 = 7.8472 Hong Kong dollars)

($1 = 6.6969 Chinese yuan renminbi)

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Toshiba board gains two directors from activist hedge funds

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© Reuters. FILE PHOTO: Toshiba logos are pictured at Toshiba Corp’s annual general meeting with its shareholders in Tokyo, Japan, June 25, 2021. REUTERS/Kim Kyung-Hoon/File Photo

TOKYO (Reuters) -Toshiba Corp shareholders endorsed two board directors from activist hedge fund investors at its annual general meeting on Tuesday – an inclusion that is expected to add momentum to its exploration of potential buyout deals.

Nabeel Bhanji, a senior portfolio manager at Elliott Management, and Eijiro Imai, managing director at Farallon Capital Management were elected, as was Akihiro Watanabe, an executive from boutique U.S. investment bank Houlihan Lokey (NYSE:HLI), who becomes chairman of its board.

All in all, seven new board directors were appointed and six were reappointed.

The appointments of Bhanji and Imai were not without controversy with one board member publicly expressing concern that the board may become too skewed towards the input of activist investors.

Toshiba (OTC:TOSYY) said this month it had received eight initial buyout proposals to go private as well as two proposals for capital alliances that would see it remain listed.

Sources have told Reuters that at least one bidder is considering offering up to 7,000 yen per share to take the company private, valuing a potential deal at up to $22 billion.

Toshiba’s shares closed at 5,707 yen on Monday, up 21% since the end of the year and giving it a market value of $18 billion.

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Asian Stocks Down as Oil Rises on Tight Supply Concerns

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© Reuters

By Zhang Mengying

Investing.com – Asia Pacific stocks were mostly down on Tuesday morning after Wall Street fell and oil prices rose on tight supply concerns.

Japan’s Nikkei 225 edged up 0.16% by 10:31 PM ET (2:31 AM GMT).

South Korea’s KOSPI fell 0.30%.

In Australia, the ASX 200 rose 0.23%.

Hong Kong’s Hang Seng was down 1.01%

China’s Shanghai Composite was down 0.49% while the Shenzhen Component was down 0.38%. To boost the recovery from COVID-19 disruption, People’s Bank of China Governor Yi Gang vowed to maintain the supportive monetary policy.

The SS&P 500 fell 0.30%, tech-heavy Nasdaq 100 fell 0.81%. U.S. Treasuries yield hovered around 3.19%.

Crude rose past $110 per barrel as supply remained tight over lost Russian supply amid sanctions on Russian oil exports. Adding to the supply concerns, Libya and Ecuador flagged potential output cuts on political unrest.

The Group of Seven (G7) leaders are set to discuss the means to tackle rising energy prices. They are considering a possible price cap on Russian crude and oil product exports at the same time while reducing the damage to economies.

“A seam of tight supply news bolstered the (oil) market,” Commonwealth Bank of Australia (OTC:CMWAY) analysts said in a research note.

“Political unrest might curtail supply from a couple of second-tier producers, Ecuador and Libya. And then there’s the G7’s proposed price cap on Russian oil.”

Earnings revisions are a risk with the US economy set to slow next year, though China emerging from COVID strictures could act as a buffer for the world economy, according to Bloomberg, quoting Lorraine Tan, Morningstar director of equity research.

“You got a US slowdown in 2023 in terms of growth, but you have China hopefully coming out of its lockdowns,” Tan told Bloomberg.

The European Central Bank (ECB) President Christine Lagarde, U.S. Federal Reserve Chair Jerome Powell, the Bank of England Governor Andrew Bailey, and Cleveland Fed President Loretta Mester due to speak at the ECB event this Wednesday.

In Asia-Pacific, China’s purchasing managers index is due on Thursday.

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