Toyota is willing to use transition financing for hybrid vehicles, which may lay the groundwork for more such automakers to follow as the government pushes to boost investment in greener technology.

The car company is considering transition bonds or loans to finance loan and lease receivables for hybrid vehicle sales, it said in a written response to questions from Bloomberg. The company said that the initiative is in line with the government-approved roadmap for the auto industry, making transition financing easier for the firm to consider as a tool.

Transition finance is a method that supports efforts by industries with high greenhouse gas emissions to achieve decarbonization. The Ministry of Economy, Trade, and Industry (METI) has been preparing technology roadmaps that outline the direction of transition for each industry since October 2021, with the latest one for the automotive sector in March.

The automobile industry is key in Japan, accounting for 16% of the country’s total carbon dioxide emissions, according to METI.

"The roadmap includes information on how to achieve net zero emissions from well to wheel, including fuel and the technologies that will contribute to this goal,” said Shunsuke Oshida, head of credit research at Manulife Investment Management Japan, who participated in developing the roadmap.

Mazda also responded in writing to Bloomberg that the specific technologies outlined in the roadmap will speed up financing decisions, making it easier to use transition finance.

The firm added that decarbonization needs to be viewed from the perspective of the entire vehicle life cycle, and that it is an issue that should be tackled together with local communities and customers, rather than by individual companies on their own.