Toyota Motor Corporation (7203) Earnings Call Transcript & Summary

Wow, I should be answering that question? So ACO has -- I mean being positive about hydrogen asset energy from very early stage, and you have had a very practical, realistic effort, and we have learned a lot of from ACO. And in our previous communication, we have -- I mean we have talked about how we have been engaging ourselves in the hydrogen engine. And we have, I mean, the attractiveness of hydrogen engine, and we do have some challenges with hydrogen engine. And it's not just today. I mean Fillon-san has -- I mean [indiscernible] really understood the hydrogen as an energy very well. And thank you very much for the announcement today. It is a very big motivation and significance for us for Toyota Motor Corporation. And I am very positive about this opportunity. So I cannot make any definitive specific statement, but I would most likely, in the near future, I hope I can make a very big announcement with a smile on my face. Positive, I'm a bit worried, my smile. I was -- a bit of worrying expression. Thank you for answering the question.

Thank you very much at this point in time. We'll take some questions from the floor. [Operator Instructions] So those who are ready to ask a question.

This is [ Karl Watch Tanigawa ] speaking. I have a question for Chairman Fillon. When it comes to 24 projects, I think every year, you have different events. And when it comes to the 100th anniversary, what is the project that you are planning to do. And of course, we will see in just 2 weeks' time, but if you could please review some of the plans as much as possible. And I have another question for President Sato. You have talked about your future vision in 2026, are you going to use compressed hydrogen or there are different technologies that you could possibly use? What is the vision or feel that you have right now?

Yes. For Mission H24 this year, the car will be in Le Mans but not running in rotary Le Mans, the support race in Le Mans but the car will have a lap just before the start of the race. And we will make some announcement during the press conference in Le Mans on Friday morning before the race about what will be the program from -- for '23, '24 and '25.

Well, thank you for the question. Mr. [ Tanigawa. ] I don't want to see -- I don't want this to be seen as kind of a prearranged question, such is not the case, but speaking of Fuji 24-hour race is the very first time in the world that we use liquid hydrogen-driven cars joining this race and using liquid hydrogen to fight in a race is something that we will see for the very first time in front of our own eyes. And of course, we have to see what the result and outcome would be and then think about what to do in the future. But speaking of what we have done in terms of development, I think high-pressure type hydrogen could be more of a -- more like the option, but that's something that we need to analyze and decide upon.

This is [ Shinya Yamamoto, ] I'm a freelance. So I have a question for Fillon-san. So earlier, you said you are very much focused on hydrogen engine Corolla. So hydrogen field racing car is actually racing -- I'm not quite sure whether you have actually seen the car yet. But -- so what is your impression? What is your emotion -- have seen the hydrogen engine car driving. And Moro-san, so rotary engine, I think you have been doing R&D of hydrogen rotary. So now what is your feeling after hearing about the announcement for 2026? Is there any inspiration?

I will see the car after. I don't see the car now, but I'm very impressed by this car. And hydrogen for me is a very interesting solution for the future. This is a zero-emission CO2, and we have to move for mobility to zero-emission. This is very important for the planet and for our children. As you know, battery electric is not very adapted for endurance. Hydrogen is very adapted. You can refuel in a short time and autonomy is very interesting. So it's the reason why we choose hydrogen in for endurance. And I'm very exciting with this technology. But I'm very -- I look forward to seeing the Corolla with liquid hydrogen because this is another step in the technology, and it's very interesting.

Well, you'll be able to take a look at this liquid hydrogen Corolla today. Now, Moro-san.

Well, thank you very much for that question. Of course, I'm looking at the #555, that's your allotted number to media representative. So I was thinking maybe this question will be one of the questions addressed by the Media Group. And then indeed, of course, Le Mans has been on the very forefront of innovation, technology development and whatnot and, of course, Chairman has talked about not only the legendary 100 years, but also 100 years going forward as well. And of course, this internal combustion technology to be in the region of the next century is something to be pleased about. And of course, in rotary engine, we've tried different materials as a source of drive and now hydrogen has been accepted by Le Mans. We will take a look at it as another possibility going forward.

Well, thank you very much for your comment. And the next question goes to.

This is [ Umeda of TBS. ] I have a question for President Sato. Now at this time in Le Mans, this internal combustion engine's potential is going to be looked at. Looking at EU, I think the same trend is starting to be under light. Of course, what is your vision for the future of this internal combustion type engine future. And the other is with regard to this hydrogen technology, you've been using this endurance race as a venue to further develop your technology. And perhaps in that light, looking back the previous 2 years or so, what are some of the learnings and achievements? And then from a kind of ordinary people's use, is hydrogen approaching that of gasoline kind of as a presence? What is your take?

Well, I think there are basically 2 questions there. One is with regard to the future and the potential of combustion engine. Of course, JAMA at the venue of G7 in Hiroshima, I had talked about this issue. When it comes to carbon neutrality, Japan has its own path of a strategy, and there are different efforts and one of which is internal combustion engine. But of course, we need to have a variety of options. We shouldn't just limit to one or a couple. When it comes to internal combustion engine, it has its own issues to be overcome. So it's not going to be just one kind of a golden answer to solve every problem. But this STQ class newly set forth, of course, different OEMs making efforts, of course, Mazda as well. Because we don't have the sufficient solution just yet, we are trying. And when it comes to this endurance race, it is the very ultimate venue where technology, the engineers and kind of a developing engineering mind can be fostered and we can train ourselves and we can create the future by that. And that challenge itself is what is very important. And it's very worthy to looking to several things, of course, various things, one of which is internal combustion. And when it comes to hydrogen engine, fuel is liquid hydrogen, but now it's [ gasinated ] before it goes into the engine. So if you compare to the high-pressure gas hydrogen, once it goes into the engine, it's the same that's after but the delivery and the pump before the engine itself is now, this time around, first time liquid. And then perhaps in terms of this responsiveness and the same high level with this liquid hydrogen. Of course, we will talk about this more in detail during the round table later in the afternoon. Of course, we've done a lot of efforts coming up for today. So we would like to invite everybody to see this challenge result. Well, thank you very much for the question.

Anyone else with a question? So I think we have a lady towards there.

This is [ Masatoshi from Nikankohi ]. So I have a question at Moro-san from Mazda. So Mazda has continuously endeavored on Le Mans, and it's now celebrating 100th anniversary. And you're going to actually do a demo run of rotary engine. So what is your, I guess, your emotion or, I guess, commitment to that happening? And so you have been honing rotary engine technology through Le Mans. So Le Mans has been a very important venue. So we are going to implement a new technology in Le Mans. So how do you see Le Mans as, I guess, the testing ground of new technology? And so what is your future vision in that context?

Thank you very much, [ Masatoshi-san, ] for a very good question. So earlier, I had mentioned Le Mans is I mean a very generous on a diversified range of technologies. That's why they have received a rotary engine. And that's why we are able to endeavor in 20 years of challenge. It was all the different OEMs. And rotary engine has became, I guess, the symbol of Mazda through that, so it's a very special occasion and a special venue. And we don't give up easily. So in the future, we will be involving ourselves to Le Mans. And I would like to someday race with master car in Sarthe, a Circuit in Le Mans. And I mean it's not the car from the past. I mean we want to, yes, engage our future vehicle in Le Mans. And we want to, I mean, bring energy to Super Taikyu. So that will be our first step for doing that. Thank you very much for the question.

So I'm being sensitive about the time, maybe one or two more questions will be possible.

This is [ Inagaki of Asahi Newspaper. ] I have two questions for President Sato. First, at TMC, in terms of the use of hydrogen, there's FCV as well, but you're going to try this liquid hydrogen for the first time in race this time around. So what are your reasons for this choice. And of course, when it comes to liquid hydrogen being tried the first time, you talked about the importance of motorsports to be fostering ground of technology. How far do you think you've come in terms of the use of hydrogen in doing so.

Well, thank you very much for the question. The details will be deferred until the afternoon roundtable session. But in the meantime, well, at that time, we will talk about the concrete progress on a part of us in terms of liquid hydrogen technology development. So please join roundtable then. But when it comes to FCV, fuel cell and hydrogen, in terms of the kind of optimization point, there are different characteristics. And you have to take a look at what is more suitable. And when you think about the internal combustion looking at the existing design, you can make use of the existing design of vehicles when it comes to internal combustion. So when you think about the roles which are on the road, the cars which are on the road, which continue to be on the road for some time, some of the possibilities will call for certain technology and whether it's engine fuel cell, it's just a means of moving cars. I think at the very bottom of it going across all types of the engine, internal combustion or fuel cell. It's the hydrogen that goes all across, in other words, producing, transporting and using, there needs to be a strong leverage of making use of hydrogen. That is the key point. For the -- it's not so much of the question of Engine OFC, but it is the very bottom line baseline use of hydrogen. And that is our target, and that's where we want to continue to focus upon. And then when it comes to hydrogen and especially liquid hydrogen, we have talked about maybe 50% or 60% in terms of progress. But there is different issues to be resolved with producing that or whatnot. But breakthrough of technology always comes after a lot of efforts. At this point in time, we're not ready to talk about any particular time frame for mass production. But I am sure that there will be a clear path for us in the breakthrough to it as we go forward.

Well, thank you very much for the question. I apologize that not all the questions have been dealt with. If there is maybe a question regarding Le Mans?

So this is [ Tamara ] from [indiscernible]. So Fillon-san, you have earlier mentioned that from '26 -- 2026, also in the highest class, you are going to allow the race car with hydrogen engine and FC to race. Okay. So again, can we understand. So yes, I mean, they would be racing at the top class of Le Mans. So maybe you haven't yet decided, but could you, yes, reply?

Yes. Thank you for the question. In '26, we will have a hydrogen category in Le Mans at the same level than the hypercar. So the idea is [ to give the assumptions ] to win to hypercar classic -- hypercar category and H2 with fuel cell or ICE hydrogen. So we will -- you know that there is a famous name, balance of performance. And of course, there will be a balance of performance between all these technologies. Because you know in Le Mans, it's important that we can hold the manufacturers to test different technology. It was the case since 100 years and we want to continue to do that. So the idea is to introduce H2 category progressively after '26 and the idea is in 2030 is to have 100% of the top category with hydrogen.

So that's another one very important announcement. Thank you very much, Fillon-san. So please, I mean, talk about your commitment to the 100th anniversary of Le Mans.

Well, thank you. I wish whole of the -- all the people involved in the 24 hours of Fuji, a great race. Of course, in 2 weeks, we will have the centenary of Le Mans. And I hope to see you in September because the World Endurance Championship is coming back in September here. And I would insist on the fact that sustainable energy is very important for endurance. And you have to know that in Fuji, and it's the case in Le Mans of course, and we hold the championship. We use a 100% renewable fuel. There is no petrol in the fuel used by the World Endurance Championships. And this fuel reduced by 65% the emission of CO2.

Thank you very much. That's the close for the press conference. Mr. Fillon and the speakers, thank you very much. [Statements in English on this transcript were Spoken by an interpreter present on the live call.]