The Japanese government has approved a massive economic program, supporting traditional fuels by eliminating excise taxes on gasoline and reducing prices, instead of a rapid transition to electrification.

Japan, known for its automotive giants and promotion of electrification, has surprised markets by approving a massive economic program that supports traditional fuels. Under the leadership of Prime Minister Sanae Takaichi, the government will eliminate excise taxes on gasoline and will intervene to reduce pump prices by up to 50%. This decision comes at a time when the global transition to green energy is slowing down, and Japanese automakers seem to be buying time in the face of pressures to adopt 100% electric vehicles.

The government is allocating approximately 117 billion euros, the largest economic program since the pandemic, to reduce fuel prices, considering the persistent inflation that has affected household incomes. In Japan, where personal transport is essential, quick and visible measures are prioritized. Although electric cars have not achieved the anticipated success, the government believes that internal combustion vehicles, including hybrids, will continue to play an important role in the next decade. The elimination of excise taxes on gasoline suggests that a rapid energy transition is currently too socially and economically costly, and this approach could influence other countries to reassess their electrification goals. Analysts suggest that we may witness a 'new energy realism', where electric vehicles coexist with hybrids and gasoline cars.