Question and
Answer Session
on the Current
Progress
Regarding
the Long-Term Vision

AGAINST THE BACKDROP OF ACCELERATED CN (CARBON NEUTRAL) INITIATIVES, PLEASE BRING US UP TO SPEED ON THE CURRENT SITUATION AND FUTURE PROSPECTS WITH REGARD TO EV MOTOR ENQUIRIES RECEIVED AT YAMAHA MOTOR.

We are working at full speed on the EV conversion of our existing products for motorcycles, mainly scooters and mopeds. In the marine products field, we are developing the electric propulsion system HARMO, but the market needs are not yet at that level. Also in the marine field, we are developing fuel cells that use both electric motors and hydrogen, but the time is not right for electrification in that field any time soon. It is necessary to further increase the speed of our activities concentrating on land vehicles.

I wondered whether everyone would be so eager to go electric so soon, but some countries are really moving ahead quickly. Depending on the kinds of state subsidies there are, demand is rising and we will need to increase our pace of development.

Regarding the delivery of high-performance EV motors, enquiries are still centered on the evaluation of prototypes. In the shipping products field, we received an order for a prototype motor (for tugboats) from IHI Power Systems. And in the aeronautical field, we have received an order for a prototype from JAXA, due to be delivered in the new year. I hear that it is for a prototype passenger aircraft that will be a future hybrid aircraft. Our high-performance motors are being used as propulsion motors. I believe that multiple motors are being coupled together.

PLEASE TELL US ABOUT THE PROGRESS AND RESULTS OF THE CN INITIATIVE "ENVIRONMENTAL PLAN 2050".

Our aim is to achieve the targets for Scopes 1 to 3* by 2050.

Regarding Scopes 1 and 2, we announced in June of 2022 that we would achieve these targets ahead of schedule, by 2035.

Since these involve our own business activities, we were able to make reductions through our own efforts, and because we had a specific goal in mind, we brought these forward. In terms of actual results for 2022, these are trending better than the graph we showed at the beginning of the year. Scopes 1 and 2 are progressing on track.

Scope 3 involves CO₂ emitted when customers use our products. Global sales of EVs and battery EVs (BEVs) are growing, but our EV market launches and sales are growing at a slightly slower rate than planned.

Our mid-term business plan calls for the launch of about 10 mainly BEV models by 2024, so we are working on that. Going forward, we will step up the pace and work towards achieving CN2050.

*Scope 1: Direct emissions of greenhouse gases by companies themselves.
Scope 2: Indirect emissions associated with the use of electricity, heat and steam supplied by other companies.
Scope 3: All indirect emissions other than Scope 1 and 2 caused by business activities, upstream (procurement-related) and downstream (after shipment).

YOU ANNOUNCED A YEAR AGO THAT YOU WERE CONSIDERING A HYDROGEN ENGINE MOTORCYCLE. WHAT'S THE PROGRESS ON THAT?

The prototype of a hydrogen-powered motorcycle has been completed. It is possible to run it with the same performance as with gasoline. However, the difficulty with hydrogen is that, unlike gasoline, the amount that can be put into a tank is limited if it remains in a gaseous state. The key will be how to store it in the motorcycle while ensuring the safety of the hydrogen fuel tank. The next challenge is infrastructure. We need to have gas stations customized so that they can be used by two-wheeled vehicles as well. We're working with Honda, Kawasaki and Suzuki to divide up the roles on research into how far we can go with hydrogen.

We, Yamaha, have built a hydrogen test lab and can conduct experiments there. Since Toyota and Suzuki have been working on tanks, we put our know-how together and discussed the best way to design hydrogen tanks for motorcycles, and who should take on which role. Now the time has come for us to start work on this.

V8 high-performance hydrogen engine

SO, YOU ARE WORKING ON HYDROGEN DEVELOPMENT, EVEN THOUGH THERE SEEMS TO BE A LOT OF CHALLENGES?

There are insurance implications. Even now, I don't think it's possible to put a battery on a large, leisure use motorcycle.

It would be a different story if someone were to come up with an innovation such as a battery that could store astonishing energy densities, but the current lithium-ion batteries and their improved versions are just no match for gasoline. We have to develop hydrogen and hydrogen synthetic fuel while keeping the internal combustion engine, otherwise we could be in trouble in the case of emergencies.

The regulations for next year's domestic motorcycle races have changed to require the use of 100% carbon neutral fuel.

First, the JSB1000 uses 100% carbon neutral fuel. I want people to learn through these races that there is such a thing in the world as carbon neutral fuel. I also learned that Europe, which is really pushing BEVs, is working hard on the development of carbon neutral fuel. In order to make sure that big bikes survive, I hope this kind of development will be carried out in Japan too.

HOW WILL YOU INCREASE OPERATING PROFIT IN ROBOTICS? IS THAT SOMETHING YOU ARE AIMING FOR?

In Robotics, we have three major areas: semiconductor back-end processes, mounters and FA. In particular, semiconductor back-end processes and mounters are focus areas for economic security.

There are clear areas of superiority and inferiority among manufacturers in the world that can produce semiconductor front-end processes. The governments of the US, Japan and Europe are working on this while they try to attract global giants, such as Taiwan's TSMC. Japanese manufacturers have strengths in back-end device manufacturing. Yamaha Motors also wants to be sure capture part of the surge in demand. As companies begin to take action to secure semiconductors amidst the conflict between the United States and China, factories producing in China are being moved to ASEAN and India.

We are also strengthening our setup so that we can receive orders from these relocated factories. As competitors are also entering the markets in the countries where these factories have been relocated, we are preparing technology development and factory investment so that we can increase our market share of semiconductor back-end processes to mounters as much as possible over the competitors.

Since China has been a center of factory concentration, orders may drop off for a while, but from a mid to long-term perspective, we are sure that they will grow. We will continue to invest in our technology development and capacity. Our hope is to have a complete system by enhancing the order reception and service systems in ASEAN and India. Currently, it has grown to a scale of 150 billion yen, but we estimate that we can probably double that amount.

REGARDING DRONES, REGULATIONS ARE GRADUALLY BECOMING LESS STRICT, AND I WOULD LIKE TO ASK ABOUT THE CURRENT SITUATION AND FUTURE PROSPECTS.

We've been doing helicopter-type drones for some time. There are differences in payloads, and the ways in which drones are used can be slightly different, but small drones are being used in national projects, and we are subcontracted to produce hardware for the drone “SOTEN” sold by ACSL.

We announced the other day that a drone that can be used for small-scale agricultural spraying has been subsidized by the Ministry of Agriculture, Forestry and Fisheries. It's an improved agricultural drone that is suitable for small-scale investment and agricultural land with complex terrain that is difficult to cover with a helicopter.

In the case of agricultural drones, the software is also important, so we are working with external partners. The field of drones is also related to economic security. National and local government projects used to use Chinese DJI drones, but they will change to the Japan-made drone "SOTEN". If our drones can compete with DJI in terms of cost and precision, we hope we can cover the domestic market with Japanese drones. But DJI are a force to be reckoned with. They're way ahead of us.