TT-421 -- Part Three: Global Warming in Japan - Electric Cars

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.

General Edition Sunday, May 20, 2007 Issue No. 421


- What's new
- News
- Candidate roundup/Vacancies
- Upcoming events
- Corrections/Feedback
- News credits

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================ Start a Company in Japan =================

Entrepreneur's Handbook Seminar 9th of June, 2007

If you have been considering setting up your own company,
find out what it takes to make it successful. Terrie Lloyd,
founder of over 13 start-up companies in Japan, will be
giving an English-language seminar and Q and A on starting
up a company in Japan. This is an ideal opportunity to find
out what is involved, and to ask specific questions that
are not normally answered in business books. All materials
are in English and are Japan-focused.

For more details:


Part Three: Global Warming in Japan -- Electric Cars

We predicted several years ago in Terrie's Take that Japan
stood a good chance of becoming the Saudi Arabia of the Far
East in terms of energy production. We were not referring
to some pending discovery of massive oil reserves, although
it seems that Japan does indeed have a big field in the
East China Sea. Rather, we were alluding to the sheer
perseverance and technological prowess of the nation's
manufacturing keiretsu and how competition is pushing them
to come up with energy alternatives.

These alternatives of which we speak include solar cells,
fuel cells, and high-density batteries. The Japanese are
deeply committed to research in these fields. And while the
foreign media may occasionally sing the praises of
breakthroughs by foreign scientists and entrepreneurs in
the field, it is the hard grind methodical approach of
their Japanese colleagues that in the long run will lead
to actual real world affordable product launches.

A case in point is the Tesla sports car This is a beautiful piece of
engineering, but while the company plans to sell up to
10,000 such units from 2009 the car is too expensive for
the average Joe because it literally uses computer laptop
batteries as the power source. Mitsubishi in contrast, is
building an entire battery factory to fuel their upcoming
2010 electric vehicle, and are apparently planning a first
run of 200,000 battery packs -- and that is just a trial

We have talked about solar cells before in TT, stating that
Sharp, Kyocera, and other leading manufacturers are working
over-capacity to meet demand for second generation cells by
the markets in Europe and domestically. All is well and
good in the sector and through numerous incremental
breakthroughs in materials science, the light-to-electrical
output efficiencies of solar cells have risen from around
15% five years ago, to more than 30% in labs today. Some
scientists predict that in 20 years time, around 10% of the
world's power needs will be generated by solar cells,
compared to less than 0.3% today.

[Continued below...]

-------------- Executive Post-Grad Studies ----------------

The Master of Science in Global Finance Program is jointly
offered by The Hong Kong University of Science and
Technology (HKUST) Business School and New York University
(NYU) Stern School of Business.

The Program is the FIRST and ONLY Part-time Finance Master
Degree Program catered for high-performance young finance
professionals in the Asia-Pacific region.
Drawn from the complementary strengths of two first-rated
finance departments in the world with world-renowned senior
faculties their respective fields, the Program provides
participants with specialized finance knowledge and
understanding of the global financial markets.

Designed with busy schedules in mind, classes will be held
once a month on weekends. The first application deadline
is 15 May 2007 (Tue) and the Program is scheduled to start
in November 2007, with classes meeting in Hong Kong and
New York.

Enquiries: Tel: (852) 2358 5028


[...Article continues]

But currently solar cells are only suitable for static
applications, requiring as they do a lot of surface area to
produce a meaningful level of power. Thus, the
all-important auto industry is looking at both fuel cells
and high-energy batteries as the most likely way of
replacing hydrocarbon burning engines.

Hydrogen-based fuel cells seem to have caught the
imagination of Japanese researchers, and as a result there
has been a steady release of new products over the years.
These devices include wheelchairs and home electricity
generation systems (both products already on sale), through
to PC battery replacements and on-board hydrogen generation
systems for automobiles.

In fact, Honda already has a sexy-looking fuel cell-driven
test car. However, while the system and vehicle works well,
the problem is that the cells have to be recharged with
Ethanol or something similar and thus require the same
extensive delivery infrastructure that hydrocarbon fuels do
today. Honda reckons it will be at least 2020 before you
can go buy and drive their fuel cell car.

For this reason, the Japanese have also been paying a lot
of attention to producing a high-density batteries, such
as might be used in a plug-in electric car (PEV), as well
as of course in electric-gas hybrids such as the Toyota
Prius. The general consensus is that with the pending
launch of Mitsubishi's MiEV mini-car in 2010, the
plug-in all-electric car will start going mainstream.

We've often wondered why Mitsubishi and not Toyota will be
first with the PEV, and why Toyota decided to focus on
hybrids and yet not make a plug-in version. From what we
can tell, Toyota is worried about the recharge time on a
car full of batteries, thus limiting PEVs to short haul
driving. For this reason, they have extended things by
including a petrol engine -- but still, why no plug in?.
Although Mitsubishi seems to have agreed with the Toyota
view that PEVs are limited to neighborhood trips, which
is why their first effort will be a little "K-car"
vehicle for Mom to do the shopping in, nevertheless they
are confident that their new vehicle will make it on
electric power alone.

Our take is that Mitsubishi will be proven right, and that
their car will stimulate a massive response in the market.
It isn't hard to imagine that they will set off a huge
buying trend -- similar in mass and speed as the change
over from vinyl disks to CDs in the 1980's, and the
subsequent change from picture tube TVs to LCDs just this
last 5 years. Again, such a trend isn't really hard to
predict, since we can guarantee that while the cost of
battery technology may come down, fuel oil will definitely
increase just as quickly, to keep the pressure on those of
us who are motorists.

The challenge with an all-electric cars is how to get
faster charges into the power storage unit. The faster you
try to charge a high-energy battery, such as a Lithium-ion
unit, the hotter the circuits get and the more dangerous
the procedure. One alternative could be for gas station
owners to have their outlets provide a battery swapping
service. Yes, such cells as they stand today would be too
big, but in the future, they should shrink significantly
in size and we imagine that swapping cell banks will be
much like swapping out 6-packs of beer.

Another possibility is that Mitsubishi and others will
license the technology for a very large capacitive device
mounted side-by-side with the batteries -- like the
"battery" from the Texas-based EEStore company, which
claims to have a recharge time of just minutes.

Our opinion is that the writing is on the wall for hybrids
even as they are just starting to become accepted in the
marketplace. We think they're temporary. The petrol engine
is partly a response to the lack of infrastructure but
probably more a psychological crutch for consumers who
have been taught to trust petrol engines rather than
electric ones. In this respect, we agree that Toyota's
hybrids are a pragmatic response. But once the Mitsubishi
proves that running out of juice is preventable with the
appropriate sensors and alerts, all-electric rechargeable
vehicles will hit the big time.

Anyway, the stumbling block is the battery technology, and
everyone knows it. All the major domestic auto makers have
aligned themselves over the last 10 years with companies
that can produce lithium-ion batteries of sufficient size
and volume. Lithium-ion is the only viable battery
technology with sufficiently high energy density to drive a
vehicle without being too heavy or voluminous. Just last
month, Nissan tied up with NEC to produce next-generation
lithium-ion batteries. Toyota has been in bed with
Matsushita since 1996, and Honda has it's own labs and

Then last week, Mitsubishi tied up with GS Yuasa. This
seems like a great move for Mitsubishi, as Yuasa is
apparently the only Japanese company able to produce large
Li-ion batteries.

We can't wait until Mitsubishi's MiEV comes out. The
company has a history of precipitating competition, just
as it did back in 1978 with the 3-door, 8-speed Mirage
(Colt). That vehicle came in response to the first oil
crisis, and proved that small cars could be sexy, cheap,
and yet reliable. The MiEV is expected to sell for
around JPY2m and should cost less than 3 yen per
kilometer (including daily charging and 5-yearly battery
changes) to run.

Lastly, our ad last week got the wrong date for the next
Entrepreneur seminar by Terrie Lloyd. This has been
corrected, and the date is indeed June 9th.

...The information janitors/


---------------------- M&A Advisory -----------------------

The Japan Inc. Advisory team is highly experienced in
helping foreign entrepreneurs both sell and buy companies
in Japan. Our experience includes:

- Fund raising for venture businesses
- Selling companies for owners looking to leave Japan
- Sourcing buy-out targets for foreign firms entering Japan
- Assisting with joint venture and takeover negotiations
- General management advice

We have a dedicated, experienced team that
specializes in smaller deals that other investment
specialists are not interested in. Email for a free and confidential


+++ NEWS

- Record trade surplus engineered?
- Regional IRCJ on the cards
- Herbal supplements boom
- Indian IT exports hit US$531m
- Number One in innovation

-> Record trade surplus engineered?

American auto makers are pointing to Japan's announcement
last week that its trade surplus was up 62.1% in March
year-on-year, at about US$176.4bn, as proof that Japan
is somehow conspiring to keep the yen cheap. The car
makers are arguing that the mechanism Japan is doing this
by is the use of low interest rates. ***Ed: While the
rates are low for other reasons -- such as the
government's desire to keep the interest bills low on its
own massive debts, certainly no one could argue that
cheap yen hasn't also resulted in a lot more profits on
exports. The question to ask is whether this phenomenon
is affecting the whole world or just some tired out car
manufacturers?** (Source: TT commentary from, May 16, 2007)

-> Regional IRCJ on the cards

After the success of the Industrial Revitalization Corp.
of Japan (IRCJ) during the period 2003-2007, it seems
that the government is now planning a similar
reconstruction organization for troubled companies in
regional cities. The new organization will have a very
similar structure to the IRCJ, reporting to the Deposit
Insurance Corporation. It will apparently have capital of
around JPY50bn and will operate for 5 years. Its role will
be to acquire stakes in struggling companies and purchase
their loans from banks. (Source: TT commentary from, May 18, 2007)

-> Herbal supplements boom

The non-prescription drug market in Japan is shrinking,
declining 2% last year, to a sales low of JPY1.14trn. In
contrast to this, the herbal medicine and supplement market
is booming, and sales increased 20% last year to a total
of JPY40bn. Chinese herbal medicines in particular are
doing well, such as an atopic skin remedy sold by Rohto
Pharmaceutical. The company told Nikkei that it is
marketing the herbs in the same manner as vitamin
supplements are sold -- in small transparent packets that
customers can visually inspect. Other medicines include
the ever popular "fat buster" preparations, immune system
builders, and special mixes for women. (Source: TT
commentary from, May 18, 2007)

-> Indian IT exports hit US$531m

The Indian Electronics and Computer Software Export
Promotion Council (ESC) has said that India sold US$531m of
software and services exports to Japan during 2005-06. ESC
said that the overall Japanese market is around US$91bn,
leaving plenty of room for further improvement. Overall,
India's total software and services export volume was
US$33.757trn. (Source: TT commentary from,
May 20, 2007)

-> Number One in innovation

The surprising results of a global innovation study by the
Economist has found that Japan leads the global rankings
for innovation, followed by Switzerland, the USA, and
Sweden. The study looked at the per capita number of
patents a given country has made as well as executive
opinions about innovation in general. The study found that
Japan has 3.5 time the per capita submission of patents
visa vis the USA. In terms of research commitment, Japan
spent US$130m last year, behind the USA at US$330bn, and
China at US$136bn. (Source: TT commentary from,
May 18, 2007)

NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.


------------------- Masters Degree ------------------------

The Master of Science in Global Finance Program is jointly
offered by The Hong Kong University of Science and
Technology (HKUST) Business School and New York University
(NYU) Stern School of Business.

The Program is the FIRST and ONLY Part-time Finance Master
Degree Program catered for high-performance young finance
professionals in the Asia-Pacific region.
Drawn from the complementary strengths of two first-rated
finance departments in the world with world-renowned senior
faculties their respective fields, the Program provides
participants with specialized finance knowledge and
understanding of the global financial markets.

Designed with busy schedules in mind, classes are to be held
once a month on weekends. The first application deadline
is 15 May 2007 (Tue) and the Program is scheduled to start
in November 2007, with classes meeting in Hong Kong and
New York.

For enquiry: Tel: (852) 2358 5028



=> LINC Japan Ltd., an affiliate of the LINC Media group,
is actively marketing the following positions and customers
for market entry customers setting up in Japan.


* Capital introduction sales manager, bilingual -- JPY30-40m
* Medical instruments CEO, bilingual -- JPY15-18m
* Medical instruments salesperson, bilingual -- JPY10-12m
* Software company CEO, bilingual -- JPY15-18m
* Experienced software salesperson, bilingual -- JPY10-12m
* Financial data analyst, bilingual -- JPY6-9m
* Network engineer, bilingual -- JPY5-8m
* IT sales trainee, bilingual -- JPY4-5m
* Help desk analyst, bilingual -- JPY4-5m
* Java software developer, bilingual -- JPY6-7m
* Freelance market entry consultants, bilingual -- Neg.


50-yr old male senior manager, non-Japanese, fluent
bilingual, wants CEO position trading or factory/logistics,
available June-July, target JPY20m-30m

* Senior IT Sales
38-yr old male IT salesperson, both hw and sw experience,
native J + good E, wants senior sales role or country
manager, available June-July, target JPY12-14m base plus

* Senior Marketing
39-yr old female Marketing/Sales manager, mainly media
background, fluent bilingual, wants senior sales role in
PR or advertising industry, available immediately, target
JPY10-12m base plus commissions

* IT Marketing
32-yr old female with operations and project management
experience in ISP/IT company, wants marketing job,
available in June/July, target JPY6-7m base

Interested Japanese or foreign candidates may e-mail
resumes to:


----------------- ICA Event - May 23 ---------------------

Speaker: Mike Alfant, President and CEO, Fusion Systems
Topic: Leadership in Entrepreneurial Ventures

Details: Complete event details at
(RSVP Required)
Date: Wednesday, May 23, 2007
Time: 6:30 Doors open, Buffet Dinner amd Open Bar included
Cost: 3,000 yen (members), 5,500 yen (non-members)

Open to all - location is Ristorante Conca d'Oro


=========== Entrepreneur Association of Tokyo =============

4th Year Anniversary Seminar - June 11

Speaker: Yoshito Hori, Chairman and CEO of Globis Group

Join us in celebrating our 4 year anniversary at the Globis
Head Office in Kojimachi with Yoshito Hori of Globis Group.
Founded in 1992 the Globis Group has five lines of business;
Globis Management School (GMS), Globis Organization Learning
(GOL), Globis Management Institute (GMI), Globis Management
Bank (GMB), and Globis Capital Partners (GCP) which manages
3 funds with ommitment exceeding JPY38bil. (US$360mil.).

Date/Time: Monday, June 11, 7:00 pm
Location: Globis Head Office
Language: English

IT events announcements are priced at JPY50,000 per week.
For more information, contact



In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
amplify our points, by email, to

-> No corrections this week.

---------------------- IT SERVICES ------------------------

Looking for IT Help Desk Support for your Company?

We at BiOS (a Division of LINC Media, Inc.) have recently
expanded our IT Help Desk to increase support for foreign
companies in Japan, both large and small. We'd like to
invite you to join up too.

Our Help Desk Department is located in the heart of Tokyo,
and is staffed by experienced, bilingual IT engineers with
an intimate knowledge of both the global technology and the
local culture. Our rates are market-competitive and our
priorities lie in customer satisfaction and quality of

For more information, visit our website at,
or contact us directly at


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