Responding to Climate Change and Energy Issues

We recognize that addressing the globally shared challenge of achieving carbon neutrality by 2050 is a critically important initiative that will determine the future of the MITSUBISHI MOTORS Group. The Group positions climate change countermeasures as one of the key issues in formulating its business strategies.  By incorporating measures to address climate-related risks and opportunities into the Environmental Plan Package, which sets forth the direction and goals of our environmental initiatives, and reflecting them in our business strategies, we are working to ensure sustainable business growth, reduce future risks, and enhance our resilience as a company.

The Group recognizes “responding to climate change and energy issues” as an important management issue and has accordingly identified it as one of our materiality issues. The Board of Directors makes decisions on important matters related to environmental initiatives, including those related to climate change, and oversees their execution. The Board of Directors approved the “Environmental Vision 2050” and “Environmental Targets 2030,” which were revised in FY2022, and these measures were announced.

To address climate change and energy issues, we have established the Sustainability Committee, chaired by the Representative Executive Officer, president & CEO, who also holds top responsibility for initiatives related to climate change. The committee evaluates climate-related risks and opportunities, discusses response measures, and reviews progress and achievements in line with the Environmental Targets 2030.
We have established the Carbon Neutrality Council under the Sustainability Committee. This council is chaired by the Representative Executive Officer, Executive Vice President and consists of executives responsible for management strategy, products, manufacturing, procurement and logistics. This organization formulates medium- to long-term policies and goals based on the assessment of climate-related risks and opportunities, considering specific response measures in each area. These policies, goals, and their progresses are reported by the respective heads of each area at the Sustainability Committee for review and deliberation. The organization generally meets three times per year, and particularly important matters are deliberated and decided by the Board of Directors.

The Group considers climate-related risks and opportunities to be an important perspective in the formulation of our business strategy. We are identifying and evaluating short-, medium-, and long-term risks and opportunities, as well as analyzing the impact on our business based on multiple climate scenarios. We are also considering countermeasures in response to these risks and opportunities.
As particularly high-impact migration risks, we identified the “strengthening of regulations for fuel economy/CO₂ and zero-emission vehicles” and the “introduction and expansion of carbon pricing.” We identified “increasing frequency and intensity of meteorological disasters” as a physical risk. While these risks may affect our business in various ways, we recognize that responding appropriately to these risks will lead to greater sales of electrified vehicles^*1 and new business opportunities.

With the vision of “creating vibrant society by realizing the potential of mobility,” the Group aims to enhance our corporate value over the long term by providing products with value that is unique to MITSUBISHI MOTORS through contributions to carbon neutrality and other efforts. As society-wide efforts to achieve carbon neutrality accelerate, we recognize that climate-related matters may affect our business, strategies, and financial plans, so we periodically review our strategies and plans as appropriate based on climate change risks and opportunities.

Based on climate scenarios and future information from organizations such as the International Energy Agency (IEA), the Intergovernmental Panel on Climate Change (IPCC), and the Network for Greening the Financial System (NGFS), MITSUBISHI MOTORS considered the “less than 2℃ scenario^*4,” which assumes actions by society to avoid climate change as of 2030 and 2050. We also looked at a “growth scenario^*5,” which assumes national policies continue to grow more stringent. Under these scenarios, we examined the risks and opportunities, focusing on areas with significant impact on our business activities.
The results of analysis related to the impact on our business of the associated risks and opportunities are as described on the following page.

The Group will incorporate measures to address climate related risks and opportunities into our Environmental Plan Package and business strategies, which set forth the direction and goals of our environmental initiatives. In this way, we are promoting initiatives to reduce future risks, ensure sustainable business growth and enhance our resilience as a company.
On the product front, we will take our own plug-in hybrid electric vehicles (PHEV) and commercial electric vehicles in the Kei-car segment as a starting point, and leveraging the Allian’s technologies. We will develop electrified vehicles and promote fuel-efficient internal combustion vehicles, proactively introducing electrified vehicles that optimally meet customers’ needs, taking into consideration the energy situation and infrastructure development status in each country and region. Working toward carbon neutrality is one of the key challenges stated in “Challenge 2025,” our mid-term business plan. We will develop electrified vehicles and step up our efforts in the Alliance as we work toward the second phase of our plan to reinforce electrified vehicles (FY2026–FY2028). By FY2028, we plan to introduce nine electrified vehicle models. To date, we have introduced five: the “ASX PHEV/HEV models,” the “COLT HEV model,” the “XPANDER HEV model,” the “XPANDER CROSS HEV model,” and the “XFORCE HEV model.” Including models launched prior to February 2023̶  the “MINICAB EV/L100 EV,” “eK X EV,” “OUTLANDER  PHEV model,” and “ECLIPSE CROSS PHEV model” -we offer a total of nine electrified vehicle models as of March 2025. In light of the global slowdown in the growth of battery EVs since 2024, we have adopted a policy of utilizing mainly OEM-supplied models from partners for battery EVs for the time being, and will concentrate our development efforts on PHEVs and HEVs, where we have a competitive advantage.
In our business activities, we are promoting energy minimization and the transition to renewable energy sources, and are working to reduce CO₂ emissions.
Across the supply chain, we will collaborate with business partners, related companies and organizations, and governments and municipalities to reduce CO₂ emissions at the production stage (through raw materials and parts) and in logistics (including products). We are also promoting renewable energy and charging infrastructure, utilize carbon-neutral fuel and promote V2X^*7.
We believe the spread of electrified vehicles represents a chance to do new business in the form of reuse of used batteries, energy management, and data business using vehicle driving and battery data, and in collaboration with our partners and municipalities we will grow a mobility business that contributes toward the realization of a carbon-neutral society, which represents a unique opportunity for us as an automotive maker, into a fourth pillar of revenue after vehicle sales, financing (leasing), and after sales.

The Group has established a cross-functional team under the Sustainability Committee to conduct scenario analysis based on the recommendations of the Task Force on Climaterelated Financial Disclosures (TCFD). We have identified and assessed climate-related risks and opportunities that could affect our business, considering their potential occurrence and impact levels. We have incorporated goals and action plans for addressing climate-related risks and opportunities that have a particularly significant impact, and are monitoring progress through the Sustainability Committee.

The climate-related risks, opportunities, and corresponding measures identified by the Sustainability Committee have been assigned to responsible executives at the executive officer level. We have set KPI and are implementing a PDCA cycle. Additionally, reports on critical risks and opportunities requiring prompt action are provided to the Board of Directors, which decides on appropriate responses.
In FY2018, we identified material issues that we should address, involving various problems related to fields of the environment, society, and governance. We have positioned “responding to climate change and energy issues” as one of the most critical material issues, and we are stepping up our efforts in this regard across the Group.

Risks affecting our business are managed throughout the Group and include risks related to the effects of climate change. In addition, the Internal Control Committee manages operational hazard risk, based on the annual “Companywide Risk Survey.”

climate-related risks and opportunities in line with its strategy and risk management process
The MITSUBISHI MOTORS Group formulated the Environmental Plan Package in 2020. Through electrified vehicles and the increased use of renewable energy, we aim to become carbon neutral by 2050 and contribute to the realization of a society that is resilient to climate change. We also formulated the “Environmental Targets 2030,” which clarifies specific initiatives to be achieved by 2030 in accordance with this vision. As major indices to be monitored and evaluated under “Action to Climate Change, we have established "CO₂ emissions from business activities" for Scope 1 and 2^*8, and "average CO₂ emissions from new vehicles" and "ratio of electrified vehicle sales" for Scope 3^*8 Category 11 (use of sold products) as key indicators for management and evaluation purposes.
In an effort to reinforce sustainable management, aimed at ensuring the Group’s sustainable growth, in FY2022 we added ESG-related items to an index used to determine the mediumto long-term performance-linked compensation for executive officers. In relation to the environment, we introduced “CO₂ emissions from business activities” as an indicator to measure progress in addressing the escalating climate.
To move forward on efforts to reduce CO₂ emissions, we introduced ICP (Internal Carbon Pricing:¥18,000 per ton of CO₂) for domestic sites from FY2024, taking into account IEA and other international carbon prices. We use this as one of the factors for consideration when making decisions on capital investment.

MITSUBISHI MOTORS Group calculates CO₂ emissions based on a GHG protocol. The table below shows the actual CO₂ emissions for Scope 1, 2, and 3 in FY2018 (the base year for our CO₂ emissions reduction target from business activities) and from FY2021 to FY2024.
To ensure our information is reliable and transparent, we have obtained independent third-party assurance for our Scope 1 and 2 emissions, as well as for Scope 3, Category 11 (use of sold products).

In our Environmental Targets 2030, the Group set the target of achieving a 40% reduction in average CO₂ emissions from new vehicles by 2030 (compared with FY2010 levels). To meet this target, we are positioning electrified vehicles, which emit low CO₂ while driving, as a core technology in responding to climate change and energy issues, and are advancing their development while also aiming to raise the electrified vehicle sales ratio to 50% by FY2030 and to 100% by FY2035. Centering on our strength in plug-in hybrid electric vehicles (PHEV), we will expand our lineup of electrified vehicles, thereby promoting their popularization and use in society and contributing toward the realization of a sustainable society.

Electric vehicles (EV) are driven by electricity in battery, so they emit no exhaust gases such as CO₂ while driving.
We released the “i-MiEV” as the world’s first mass-produced EV in 2009. In addition to its environmental performance, the “i-MiEV” performed better than conventional gasoline engine vehicles on quietness and acceleration starting from maximum torque. In 2011, we launched the “MINICABMiEV,” a Kei-car segment commercial electric EV. In 2012, we began offering the “MINICABMiEV TRUCK,” also an EV in the Kei-car segment.  These technologies are the foundation of next-generation EVs, such as PHEV.
We believe that expanding the lineup of Kei-car EVs, which are expected to be used in more everyday situations, will be the key to the spread of electrified vehicles. Accordingly, in June 2022 we launched the “eK X EV,” a new EV in the Kei-car segment, and in December 2023 we launched the “MINICAB EV,” new commercial EV in the Kei-car segment.

MITSUBISHI MOTORS’ HEV system offers EV mode, series hybrid mode, parallel hybrid mode, and regenerative mode. The system automatically selects the optimal driving mode according to driving conditions and remaining drive battery capacity to achieve low fuel consumption and powerful and pleasant motor drive.
When starting off or at low speeds, in EV mode the vehicle runs on electric power alone, with the drive battery supplying power to the motor. In series hybrid mode, when the vehicle is climbing or accelerating, the engine is used to generate electricity, and the motor is used to drive the vehicle in combination with power from the drive battery. At higher speeds, the system switches to parallel hybrid mode, in which the car runs on engine power and is assisted by the motor. In regenerative mode, the vehicle recovers energy from deceleration, which it converts into electric power and stores in the drive battery.
In FY2024, we began launch of the new "ASX HEV model" in Europe and the new "XFORCE HEV model" in Thailand.

By leveraging the large-capacity batteries on its electric vehicles (EV) and PHEV and their power supply functions, we are promoting adaptation measures to climate change and energy issues in collaboration with other industries. We are applying these to such areas as energy management, V2X^*10 and use as emergency power sources in times of disaster.

MITSUBISHI MOTORS is continuously promoting the development of powertrain technologies to reduce fuel consumption and improve energy efficiency.

This technology involves the intensive charging of the battery using electric power generated while decelerating. This reduces the amount of power required from the engine, thereby improving fuel economy.

The new “TRITON” we launched in Thailand in July 2023 is equipped with a new 2.4L diesel turbo engine. The weight and friction losses of the engine are reduced due to the optimally designed key components such as the cylinder block, piston and connecting rods. Additionally, the fuel injection system has been upgraded to the next generation, providing high performance while achieving excellent fuel efficiency and clean exhaust gas characteristics.

In February 2024, we added a higher-output version of the engine with a two-stage turbocharger. With a maximum output of 150 kW and maximum torque of 470 Nm, it delivers powerful acceleration and abundant torque that rises responsively from low to mid-range speeds.

To achieve carbon neutral, the Group will approach the issue from both the “demand side” (energy consumption) and the “supply side” (energy generation and procurement). To ensure our activities are carried out systematically, we have formulated a medium- to long-term roadmap toward carbon neutrality. Following this plan, we are working to develop future technologies, improve production processes and expand the introduction of renewable energy.
We have established the Subcommittee to Promote the Reduction of CO₂ as an infrastructure of the Sustainability Committee. The subcommittee, which has members from production, development and dealers in Japan and overseas, aims to help the entire MITSUBISHI MOTORS Group achieve carbon neutrality in its business activities. Beside sharing information on the progress of action plans, actual CO₂ emissions, and other pertinent data. The committee also drafts reduction measures, considers future technologies, and deliberates the future energy mix.

The MITSUBISHI MOTORS Group is actively seeking to use renewable energy in its operations, taking into consideration the energy situation at each site. To do so, we are introducing in-house renewable energy generation and purchasing renewable energy from energy suppliers.
We believe solar power offers us an important way to achieve carbon neutrality, and we are proactively introducing solar power generation at our locations. In addition, we began introducing electricity derived from renewable energy sources for some of our domestic and overseas production facilities, and we plan to gradually expand this initiative going forward.

To reduce CO₂ emissions from production activities, we have established a medium- to long-term roadmap to achieve carbon neutrality in each area of production technology̶pressing, welding, painting, assembly and powertrain̶and we are developing future technologies and improving production processes to this end. We are incorporating measures such as production efficiency improvements and the introduction of energy-saving equipment into our capital investment plans and implementing them to promote energy conservation in the production process. In energy-saving activities involving participants from production sites, production technology, and power supply department, we are working on operational improvements and loss prevention following the introduction of new equipment.

We are also promoting the use of renewable energy and introducing various types of energy-saving equipment in areas other than manufacturing, such as at R&D and head office locations. Part of the electric power used at the Research and Development Building (Okazaki, Aichi Prefecture) and head office (Minato-ku, Tokyo) is supplied by renewable energy, thanks to the erection of rooftop solar power system and making use of the Tradable Green Certificates System^*17. Also, CO₂ emissions are being reduced by using energy-saving electrical equipment and air conditioners. In 2020, we began tracking electricity use and power generation per capita at our Research and Development Building, comparing these figures with other offices, and using digital signage to show year-on-year comparisons by month. In these ways, we are working to increase employee awareness about saving energy

We encourage our dealers in Japan to acquire Eco-Action 21^*18 certification and carry out activities such as reducing the amount of energy and water they use, lowering the amount of waste they produce, and promoting the widespread use of electrified vehicles.
We are expanding the nationwide rollout of DENDO DRIVE STATIONs̶next-generation dealerships where visitors can experience the appeal of electrified vehicles, including their use as power sources in times of disaster and their contribution to the environment.

The Group is promoting initiatives to capture and visualize global logistics CO₂ emissions across the supply chain, including overseas operations. In addition to the ongoing efforts to understand logistics CO₂ emissions from overseas production plants, from FY2023, we expanded the scope to include overseas vehicle sales subsidiaries. Furthermore, we are analyzing the visualized logistics CO₂ emissions and promoting initiatives to reduce emissions.

The Group is promoting initiatives to reduce Logistics CO₂ emissions in the transportation of production parts, after sales parts, and finished vehicles. Key logistics efficiency measures include not only improvements driven by our own efforts, such as packaging improvements and increasing transport loading rates, but also active and comprehensive initiatives through collaboration with logistics partners. These include promoting eco-driving, increasing the size of transport equipment, modal shifts, reducing transport distances through joint transportation with alliance partners, and shared use of logistics facilities. We have been implementing these initiatives proactively for some time. In addition to these proactive and comprehensive measures, we are considering collaborating more closely with logistics partners to encourage the introduction of vehicles that run on non-fossil fuels.

The Group aims to become carbon neutral across the supply chain by 2050. To do so, it is essential that our suppliers reduce CO₂ emissions.

In November 2023, we held a briefing session for our suppliers to share the Group’s initiatives toward carbon neutrality and deepened communication with suppliers handling items with high CO₂ emissions and emissions reduction. By the end of FY2024, we had supported concrete activities to reduce CO₂ emissions at three supplier companies. We also invited suppliers to our in-house exhibition showcasing energy-saving products, services, and technologies, with 44 companies participating. Furthermore, following FY2023, we continued in FY2024 to use the CDP^*22 Supply Chain Program to better understand our suppliers’ initiatives, as well as related risks and opportunities.

In FY2025 and beyond, we will continue to collaborate with our business partners to promote activities aimed at reducing CO₂ emissions throughout the supply chain.