How the Automotive Sector is Shaping Decarbonization Policy in Emerging Markets

This briefing is part of InfluenceMap's global program assessing how the automotive industry engages with government policy and regulation on vehicle decarbonization. The analysis draws on InfluenceMap's globally recognized LobbyMap methodology. It is designed to inform our network of partners and users: investors, the corporate sector, civil society, and policymakers working to advance science aligned climate policy. This includes participants in Drive Electric and Climate Action 100+ Investor Stewardship processes.

Executive Summary

• New InfluenceMap research reveals divergent approaches among Japanese and Chinese automotive manufacturers in their engagement with vehicle decarbonization policy across emerging markets. Analyzing corporate and industry association advocacy in China, Japan, Brazil, Colombia, and Indonesia, the research finds that Japanese automakers are significantly more active in vehicle electrification and more likely to oppose a rapid transition to electric vehicles (EVs). Chinese automakers engage far less but are more supportive of a transition to EVs. These contrasting engagement patterns are likely indicative of broader divergences in corporate strategy and should be seen as a leading indicator of how these manufacturers will approach EV policy in other markets.

• Japanese automakers pursue a consistent cross-market strategy of delaying the EV transition, advocating for a “multi-pathway” approach that emphasizes hybrid vehicles and alternative fuels over battery-electric vehicles. This strategy is deployed both domestically and in key growth markets, with Toyota and the Japan Automobile Manufacturers Association (JAMA) particularly active entities. The clearest example of this influence is Indonesia, where JAMA participated directly in Japan-Indonesia automotive dialogues and advocated for biofuels and a multi-pathway framework, language that was subsequently echoed by government ministers.

• Chinese automakers deploy these narratives far less frequently and express more supportive positions on electrification when they engage. However, their advocacy on automotive decarbonization across the markets analyzed remains limited. As their exports expand, their approach to policy engagement in these markets will be worth monitoring closely.

• Regional industry associations across Brazil, Colombia, and Indonesia serve as the primary channel for automotive policy engagement. Their positions are predominantly unsupportive of decarbonization policy, and promoted a multi-pathway approach, hybrid vehicles, and alternative fuels, all of which are not science-aligned. Direct engagement by automakers with specific policies is limited, with notable exceptions including the MOVER program in Brazil and EV incentive policies in Indonesia. Japanese automakers hold stronger membership representation within these industry associations, though some Chinese automakers are members of associations that promoted delay tactics. This raises questions about whether these associations fully reflect the diversity of views among their members and highlights the importance of greater transparency and accountability in representing member positions.

Figure 1: Automotive Industry Influence on EV Transition in Emerging Markets

Glossary

• Policy Engagement - Corporate activities aimed at influencing climate-related government policy. These include advertising, social media, responses to consultations and direct meetings with government officials. This definition draws on the UN Guide for Responsible Corporate Engagement in Climate Policy (2013).
• Vehicle Decarbonization Policy - An umbrella term for government policies that result in the decarbonization of road transport, which include incentives for alternative powertrains, fuel economy standards, or taxes on carbon-intensive vehicles.
• New Energy Vehicle (NEV) - A vehicle powered by non-conventional energy sources, including battery-electric vehicles, plug-in hybrid vehicles, and fuel cell electric vehicles.
• Electric vehicle (EV) - An umbrella term for an electrified vehicle, including battery-electric vehicles, plug-in hybrids, and fuel cell electric vehicles.
• Internal Combustion Engine (ICE) - Vehicles with an engine that is powered by the burning of fuel, typically gasoline or diesel.
• Battery Electric Vehicle (BEV) - A fully electric vehicle, powered by rechargeable batteries with no internal combustion engine. BEVs have zero tailpipe emissions.
• Plug-in Hybrid Vehicle (PHEV) - A vehicle that combines both an internal combustion engine and an electric motor. The battery is rechargeable, but the vehicle will run on the combustion engine when the electric range runs out. PHEVs still have tailpipe emissions due to the combustion engine.
• ICE-powered Hybrid Vehicle - Unlike a BEV or PHEV, an ICE-powered hybrid cannot be plugged in; the combustion engine is its main power source. These hybrids have greater tailpipe emissions than PHEVs and BEVs.
• Fuel Cell Electric Vehicle (FCEV) - An electric vehicle powered by hydrogen.

1. About This Briefing

This briefing examines the differing approaches of Japanese and Chinese automakers in advocating on automotive decarbonization policy globally. Japanese and Chinese automakers with global sales exceeding 2 million units in 2025 were considered for this report: BYD, Geely¹, Chery, SAIC Motor, FAW, Changan, Toyota, Honda, Nissan and Suzuki ².

Automakers from China and Japan accounted for approximately 57% of global vehicle sales in 2025, giving them significant influence over the pace and direction of transport decarbonization. An assessment of corporate climate policy engagement across markets offers a critical lens for evaluating corporate strategy: when high levels of negative engagement persist, it may indicate that companies are seeking to hold back, rather than prepare for, a transition to zero-emissions transport. Whereas science-aligned advocacy suggests readiness to align with government ambition on climate.

This briefing assesses the corporate climate policy engagement of Japanese and Chinese automakers domestically and in Brazil, Colombia, and Indonesia between January 2024 and December 2025. These three regions were chosen because, while they have domestic manufacturing and assembly alongside imports, they are heavily reliant on internationally owned brands, making the influence of global automakers significant. These regions also represent growing automotive markets with developing climate policies and rapidly growing EV sales. Therefore, examining the advocacy practices of established incumbents with new market entrants in these regions is likely indicative of automakers’ approach to decarbonization policies in emerging markets.

This briefing also assesses five industry associations: the China Association of Automobile Manufacturers (CAAM), the Japan Automobile Manufacturers Association (JAMA), the Brazilian Association of Automotive Vehicle Manufacturers (ANFAVEA), the Colombian Asociación Nacional de Movilidad Sostenible (ANDEMOS), and the Association of Indonesian Automotive Industry (GAIKINDO). InfluenceMap’s methodology for assessing policy engagement is available on our website. See Appendix 1 for the performance bands for assessed entities.

¹ While Volvo Cars is a subsidiary of Geely, it has a separate profile to its parent company under LobbyMap due to its significant operations and advocacy under its brand name. InfluenceMap has identified broad support from Volvo Cars for electrification in Brazil and Colombia.

² Changan and FAW were subsequently excluded from the analysis because their engagement intensity is below the 5% threshold. Engagement Intensity is a measure of the level of engagement activity demonstrated by the entity. A score above 12% indicates active engagement, while above 25% indicates active or strategic engagement. A score below 12% indicates relatively limited engagement. EI indicates the level of advocacy irrespective of whether that activity is positive or negative.

2. Road Transport and Climate Change

2.1 Greenhouse Gas Emissions from Light-duty Vehicles

The Intergovernmental Panel on Climate Change (IPCC) April 2022 Working Group III report (AR6) estimated that in 2019 the transport sector produced about 15% of total GHG emissions (10.1.2, 1056), with road transport accounting for almost 70% of all transport emissions (10.1.2, 1056).

The urgency of decarbonizing the automotive sector has driven new policies that promote fuel-efficient and zero-emission vehicles (ZEV). Global electric vehicle (EV) sales rose from 3% to 26% between 2020 and 2025, while sales of internal combustion engine (ICE) vehicles peaked in 2017. However, the International Energy Agency (IEA)’s Net Zero Emissions by 2050 scenario concluded that two-thirds of new global light-duty sales must be battery electric (BEVs), fuel cell (FCEVs), or plug-in hybrid (PHEVs) by 2030 to align with a 1.5-degree warming pathway. With this milestone approaching, the next four years are critical for global automotive policy.

2.2 Current Market Dynamics

Chinese automakers are rapidly expanding EV sales globally, while Japanese manufacturers are losing market share in key regions. Global EV sales grew by 20% to exceed 20 million in 2025, with China manufacturing almost three-quarters of the EVs produced globally and exports doubling to 2.5 million. In 2026, global EV sales are expected to grow to 23 million, representing 28% of total car sales.

China saw the fastest expansion, as almost 55% of new cars sold electric in 2025, with domestic manufacturers leading: BYD (27%), Geely (12%), and SAIC Motor (6%). In contrast, Japanese automakers’ market share in China fell from 24% in 2020 to under 9% in 2025.

In Japan, EVs accounted for less than 3% of sales, while ICE-powered hybrid vehicles accounted for a third of all car sales in 2025. This reflects Japanese automaker’s long-standing focus on hybrids and automakers’ recently reduced global EV strategies, including Toyota and Honda. However, Japanese automakers still controlled 95% of the domestic Japanese market in 2024.

Meanwhile, emerging markets are becoming leaders in EV adoption, with sales growing by 75% in Latin America in 2025 and more than doubling in Southeast Asia: EV sales in Brazil and Colombia overtook Japan's, and Indonesia’s exceeded the US in 2025. Both regions have a strong presence of Chinese EV imports, meanwhile Japanese automakers have been losing market share in Southeast Asia, and BYD overtook Toyota’s vehicle sales in Brazil in January 2026.

• Brazil: EV sales reached 9% in 2025, up from 6.5% in 2024, with BYD making up 59% of the market share. In contrast to other regions, PHEVs outsold BEVs in recent years, including those from Chinese manufacturers. However, BEVs have grown steadily, representing 44% of EV sales in 2025. In 2025, approximately 85% of EVs were made in China, while Geely, MG Motor (SAIC Motor subsidiary), and Omoda/Jaecoo (Chery subsidiary) plan to begin local EV assembly in 2026, following BYD which started local assembly in 2025.

• Colombia: EVs accounted for 10% of sales in 2025, up from 1% in 2020. BEVs were responsible for nearly 8% of EV sales. BYD held 47% market share, while Chery also produced top-selling models. EV sales continue to grow, with January 2026 showing an 82% increase over January 2025.

• Indonesia: EV sales reached 15% in 2025 up from 0% in 2020. Approximately 75% of 2025 sales were imports from China, while the rest were cars produced domestically by Chinese manufacturers: with SAIC Motor and BYD accounting for over 60% of the market in March 2025. As of May 2025, seven EV manufacturers had committed to setting up manufacturing facilities in Indonesia.

Geopolitical developments and oil price spikes occurring in 2026, after the scope of this analysis, are augmenting EV demand and may exacerbate this shift. This momentum is reflected in China’s recent surge in exports, which more than doubled in March 2026 to 140% year-on-year growth.

Table 1: IEA Transport Sector Emissions Data by Country (2022) and Light-Duty EV (BEV, FCEV, and PHEV) Sales

To reduce GHG emissions, China, Japan, Brazil, Colombia, and Indonesia have introduced policies aimed to decarbonize their economies and mitigate the environmental impacts of ICE vehicles. These measures likely contributed to the recent growth in EV sales across these markets.

Table 2: Key Automotive Policies by Region

3. Domestic Advocacy of Chinese and Japanese Automakers

This section examines and compares how the Chinese and Japanese automotive industries engaged with domestic vehicle decarbonization policies in China and Japan, respectively.

In China, Chinese automakers and the Chinese Association of Automotive Manufacturers (CAAM) generally supported policies promoting a transition to “new energy vehicles” (NEVs) - including battery electric vehicles (BEVs), plug-in hybrid vehicles (PHEVs), and fuel cell electric vehicles (FCEVs) - although their level of engagement was limited. In contrast, in Japan, the automotive industry, particularly the Japanese Automobile Manufacturers Association (JAMA), engaged more actively with policy but broadly opposed automotive policies, while expressing some support for cross-sector policies.

Table 3: Breakdown of Domestic Advocacy in China and Japan Between January 2024 and December 2025

4. Advocacy of Automakers and Associations with Vehicle Decarbonization Policies in Emerging Markets

This section examines the membership of Chinese and Japanese automakers over regional industry associations, and how Chinese and Japanese automakers, alongside such associations, engaged with and attempted to influence key vehicle decarbonization policies in Brazil, Colombia, and Indonesia.

Across Brazil, Colombia, and Indonesia, automotive policy advocacy was largely driven by industry associations, which generally opposed measures aimed at accelerating the transition away from ICE vehicles. Japanese automakers hold stronger membership representation within these industry associations, though Chinese automakers are members of associations that promoted delay tactics.

4.1 Membership to Regional Industry Associations in Brazil, Colombia, and Indonesia

Japanese automakers hold more influential roles in regional industry associations, with multiple manufacturers holding executive positions in ANFAVEA and GAIKINDO. Only one Chinese manufacturer is a member of ANFAVEA and ANDEMOS, while all four are members of GAIKINDO. Across all three regional industry associations, Chinese companies are also less represented in leadership roles than Japanese counterparts. This suggests that Japanese automakers are likely to exert greater influence over these associations, which may, in turn, more strongly reflect and channel the positions of Japanese companies than those of their Chinese counterparts.

Table 4: Membership to Regional Industry Associations

4.2 Vehicle Decarbonization Policy Engagement in Brazil, Colombia, and Indonesia

Advocacy was primarily conducted through industry associations across all three regions, except for Indonesia’s incentives and Brazil’s MOVER program. Industry associations adopted unsupportive positions on all policies except the MOVER program.

Engagement in Brazil

• The automotive industry widely supported MOVER. Japanese automakers, BYD, and ANFAVEA supported the MOVER program, with Toyota specifically praising its technology-neutrality approach. MOVER sets mandatory targets for improvements in energy efficiency, CO₂ reductions and ties tax credits to technology neutral sustainability criteria, with biofuel-based technologies and hybrids being eligible for tax incentives. The policy framework is aligned with the advocacy priorities of automakers: alternative fuels, hybrids, and technology neutrality (see section 4.3).
• Advocacy on the Selective Tax was limited and mixed, with BYD adopting a more supportive position than ANFAVEA. ANFAVEA opposed the Selective Tax while BYD supported increasing its emissions reduction potential by exempting EVs.

Engagement in Colombia

• ANDEMOS’s opposition to increased taxes on ICE vehicles hindered the government’s top-line ambitions. While not a formal policy proposal, in May 2024, Colombia signed the Zero Emission Vehicle (ZEV) Declaration to work towards all new car and van sales being ZEV by 2040. However, ANDEMOS opposed measures to incentivize a transition away from ICE vehicles, including increased import tariffs on ICE vehicles and advocating to weaken incentives for BEVs by including ICE-powered hybrid vehicles.
• Chinese and Japanese automakers did not directly engage with Colombia’s automotive policy in 2024–2025, despite sales in the region. Limited engagement may reflect the lack of formal policy proposals, but previous consultations also received limited responses. The 2022 consultation on light-duty vehicle fuel efficiency standards saw responses from General Motors, Asociación Nacional de Empresarios de Colombia (ANDI) and ANDEMOS—but none from Chinese or Japanese automakers. In response, the Ministry committed to improving the proposal, but has not launched a consultation since.

Engagement in Indonesia

• In the lead-up to policy decisions on incentives for 2025, GAIKINDO and Japanese automakers frequently advocated to weaken BEV incentives by including ICE-powered hybrid vehicles. In 2024, GAIKINDO and Toyota repeatedly pushed for extending BEV tax incentives to ICE-powered hybrid vehicles, with Nissan, Suzuki, and Honda also advocating this position. There is some evidence that MG Motor, a SAIC Motor subsidiary, supported incentives for hybrids to balance fuel subsidies for ICE vehicles. BYD advocated for continued incentives for BEVs beyond 2024. In December 2024, “luxury goods sales tax” reductions were adopted for “low carbon emission vehicles”—including ICE-powered hybrids and PHEVs—until December 2025.
• Once the incentives were extended to ICE-powered hybrids and PHEVs, GAIKINDO advocated to further weaken the policy, but BYD offered broad support while appearing to back a complete transition to BEVs. GAIKINDO advocated to weaken the measure further by offering incentives for “all technologies,” including ICE vehicles and “low-cost green cars” (affordable, fuel-efficient ICE vehicles). In contrast, BYD supported tax incentives for both BEVs and hybrids while stating that “the transition between ICE and complete vehicles is the most optimal and significant for carbon reduction”.
• GAIKINDO’s policy positions are more closely aligned with those of its Japanese members, despite BYD, Chery, Geely, and SAIC Motor being members. This raises questions about whether these associations fully reflect the diversity of views among their members, and highlights the importance of greater transparency and accountability in representing member positions.

Table 5: Engagement with Vehicle Decarbonization Policies in Brazil, Colombia, and Indonesia between January 2024 and December 2025

5. How Automakers Frame Decarbonization Domestically and in Brazil, Colombia, and Indonesia

This section examines Chinese and Japanese automakers and industry associations’ rhetoric on automotive decarbonization across all markets. It assesses how arguments around EVs and competing technologies have been incorporated into the industry’s communication strategies and how these align with the conclusions of the Intergovernmental Panel on Climate Change.

Japanese automakers advocated for the continued role of ICE vehicles through a coordinated global strategy. Central to this was the promotion of a so-called “multi-pathway” approach, which positions ICE-powered hybrids, plug-in hybrids, and alternative fuels as viable solutions for decarbonizing the automotive sector—sometimes alongside BEVs, or even in their stead. In this regard, Toyota emerged as a particularly influential actor. Industry associations reinforced this position, with JAMA extending its advocacy to Brazil and Indonesia. In contrast, Chinese automakers deploy these narratives less frequently and express more supportive positions on electrification when they engage, and CAAM did not appear to advocate internationally.

5.1 Technology Neutrality - Multi-Pathway Approach

Japanese automakers and JAMA have been early advocates for a “multi-pathway” approach and consistently promoted it both domestically and internationally. Ministers in Indonesia and Japan subsequently echoed this narrative. Regional industry associations also promoted technology-neutrality, echoing Japanese automakers’ language. In contrast, technology-neutrality has been very rarely used by the Chinese automotive industry.

Table 6: Advocacy for a Multi-Pathway Approach by Chinese and Japanese Automakers and Industry Associations Between January 2024 and December 2025

5.2 Alternative Fuels

As part of a multi-pathway approach, the Japanese automotive industry promoted a role for biofuels in ICE-powered vehicles, often over rapid and complete electrification, in communications on automotive decarbonization domestically and internationally. This advocacy was particularly strong in Indonesia, where JAMA collaborated with Japanese and Indonesian ministries to encourage biofuel production. There was some support for alternative fuels among Chinese manufacturers in China and Brazil, but this was less consistent than their Japanese counterparts. Advocacy for a longer-term role for ICE-vehicles through the use of alternative fuels likely reflects automaker’s technological focus, as ICE vehicles made up the vast majority of Japanese automaker sales in 2024. Meanwhile, BYD's support for ethanol may reflect its Song Pro flex-fuel model, developed for the Brazilian market.

Table 7: Advocacy for Alternative Fuels by Chinese and Japanese Automakers and Industry Associations Between January 2024 and December 2025

5.3 Hybrid Vehicles

Chinese manufacturers expressed some support for hybrid vehicles. However, advocacy was more frequent among Japanese automakers, which appeared to push for ICE-powered hybrids over rapid electrification as part of a “multi-pathway” approach. Industry associations also promoted a role for ICE-powered hybrid vehicles. This likely reflects automakers’ broader technology strategies. For example, Toyota plans a 30% increase in its global hybrid production by 2028, while Honda has scaled back its BEV targets and is planning on launching 13 hybrid models globally from 2027. Meanwhile, many Chinese automakers increased the PHEV share of EV sales between 2023 and 2024.

Table 8: Advocacy for Hybrid Vehicles by Chinese and Japanese Automakers and Industry Associations Between January 2024 and December 2025

While promoting a “multi-pathway” approach that includes alternative fuels and hybrid vehicles, Japanese automakers also directly highlighted concerns with BEVs and promoted ICE vehicles. Chinese automakers used these narratives far less frequently and tended to be more supportive of electrification. For example, in a May 2024 press release, when referring to Indonesia’s transition, SAIC Motor stated that “it is clear that EVs offer many advantages over gasoline-powered cars…while the investment may seem higher, the longer-term benefits and contribution to the environment make EVs a more ‘economical' and responsible choice”. Japanese automakers’ positions likely reflect their technological focus as ICCT’s Global Automaker Rating shows that ICE vehicles made up the vast majority of Toyota, Honda, Nissan, and Suzuki’s sales in 2025, with minor increases in their ZEVe³ share. In comparison, BYD stopped producing ICE vehicles in 2022, while SAIC Motor, Geely, and Chery increased their ZEVe³ share by a greater proportion between 2024-2025 than their Japanese counterparts. However, Chinese automakers’ level of advocacy with specific climate policies globally remains limited. Meanwhile, regional industry associations echoed calls for a multi-pathway approach, hybrid vehicles, and alternative fuels, appearing to more strongly represent the positions of their Japanese members than those of Chinese automakers. Consequently, the dominant advocacy position is often resistant to a rapid transition to BEVs, with these narratives serving as a key delay tactic and likely influencing the progression of vehicle decarbonization policy and policymakers' perceptions—as evidenced by ministers in Japan and Indonesia echoing this terminology.

³ ZEVe sales share is the sum of a manufacturers' light-duty ZEV share with a discounted PHEV share. PHEVs are considered partial ZEVs under ICCT's methodology based on the period driven with the combustion engine.

Appendices

Appendix 1: Automakers’ ZEV Equivalent Sales Data and Policy Engagement Performance