The Impact of Automobile Electrification on the Regional Economy

The impact of automobile electrification on local economies is an important issue. The headquarters and main factories of the Toyota Motor Corporation are in Toyota City and the surrounding municipalities in Aichi prefecture, which is called the Nishi-mikawa area. Here, by using an inter-municipal IOT of Aichi Prefecture, discussed in Chapter 6, we analyze the municipalities’ induced production effects from the electrification of the automobile industry up to 2030. Several kinds of automobiles are available for electrification, each of which has different input structures for production, though the demand is aggregated to one sector that provides the same function of automobiles. This makes the number of rows and columns in the IOT different. Here, we adopted a scenario analysis in which each input structure was aggregated into one, using the given shares of each type of vehicle as a weight. We obtained the result that production in municipal economies that supply more automotive parts is more negatively impacted by electrification; however, a positive effect does exist in the electrical machinery industry.