“Green” Strategy

MAY 26, 2021 Yukihiro Shinohara Senior Executive Officer, CCRO, DENSO Corporation

DENSO supports the Sustainable Development Goals (SDGs). Past Efforts to Achieve a Sustainable Region/Society 2000 2015 2017 2020 Company Eco Vision2005 2015 Eco Vision 2025 Electric propulsion Policy system for urban air mobility Mobility Mass production Advanced development New mobility In-vehicle Steady efforts to promote Energy management system electrification

MG technology Next-generation Double-sided battery ECU In-wheel motor Electrification cooling inverter SiC inverter Next-generation MG

Common rail system FC equipment SiC boost converter ICE/Thermal Catalyst Gasoline direct- Sensor (Chemical reaction) technology injection lean- burn

CO2 circulation Energy Advanced development CO2 circulation demonstration Artificial photosynthesis concept Microalgae biofuel SOFC H CO2 2 ＋ Development Integration

Fuel H2O of environmental → ＋ technologies Demonstration plant Non-automotive Dynamic Wireless Power Transfer Wireless Power Transfer (Toyota City‘s feasibility study)

DENSO has promoted efforts to reduce CO2 emissions throughout its business operations around the world. DENSO DIALOG DAY 2021 / May 26th, 2021 2 / 00 © DENSO CORPORATION All Rights Reserved. Global Developments Related to Carbon Neutrality

• Invest €1 trillion in Green Deal (10 years) • Carbon neutrality by 2050 declared by Tens of billions of euros to be invested by President Biden respective countries • Invest $2 trillion in clean energy (four years) • Introduce a carbon border tax • Capture CO2 on a large scale and demonstrate • Expand renewable energy, reduce costs, and usage terminate coal-fired thermal power generation Example: Capture CO2 in the atmosphere and turn it (U.K., France, Netherlands, etc.: by 2030) into liquid fuel • Introduce CP*1 and improve and promote EU- ETS*2 • Capture CO2 on a large scale and demonstrate usage *1 Carbon Price *2 EU-Emission Trade System • Carbon neutrality by 2050 declared by • Many Chinese renewable energy companies Prime Minister Suga ranked among the top 10 in the world • Invest two trillion yen in the Green (Nine photovoltaic power companies and four Innovation Fund wind power companies are Chinese.) • Reduce CO2 by 46% by 2030 • Strengthen the EV industry • Cost of renewable energy: high, supply • Increase nuclear power generation five- or six- amount: small fold The global community has been shifting focus from “low” carbon ➡ “zero” carbon. DENSO will promote technology innovation and solve social issues through its business.

Renewable energy Energy conversion CO₂ capture

Fuel Electricity Hydrogen Gas

Green Energy・Recycle Material CO2・Waste

Carbon cycle ①Manufacturing ②Mobility products

CO2 CO CO CO2 CO2 2 2 CO2

CO CO2 CO2 CO2 CO2 2 Material Parts Produce cars Use cars Waste

Achieve carbon neutrality by taking full advantage of renewable energy and capturing and using CO2

Efforts to achieve zero CO2 emissions from factories

DENSO DIALOG DAY 2021 / May 26th, 2021 5 / 00 © DENSO CORPORATION All Rights Reserved. Basic Strategy for Carbon Neutrality in Manufacturing: “Change Energy and Manufacturing” 2025: Achieve carbon neutrality for electricity (use credits for gas) Goal 2035: Achieve full carbon neutrality for manufacturing 100 (1.9 million ton) Renewable energy Energy (2) Achieve carbon Energy conservation conservation neutrality for energy Credit Renewable purchased from outside CO energy 2 On-site 86 (3) Achieve energy conservation by sourced 88 Energy production supply innovation from (1) Achieve thorough conservation CO2 Renewable electricity energy conservation Renewable sourced energy and increase supply of energy 65 renewable energy from Off-site On-site electricity (purchase) Renewable energy Off-site CO2 (purchase) CO sourced 2 Credit (4) Achieve carbon sourced CN gas from gas offset neutrality for CO2 from gas CO2 capture emissions from gas 2020 2025 2035 ・ Thoroughly accomplish energy conservation at factories to eliminate waste ・ Secure renewable energy (including credits) and achieve carbon neutrality of energy purchased from outside ・ Promote factory reorganization/innovation and promote carbon neutrality of gas

Green Energy・Recycle Material CO2・Waste

(1) Develop energy-saving Factory (2) Develop super-eco-friendly techniques/low-C materials equipment • Modularize Heating, processing/assembly Deployment and • Thermal binding → Molecular binding • Production control platform support for achieving • Die casting → Bio resins carbon neutrality of the entire supply chain

Continue and strengthen energy conservation activities (3) Achieve zero production loss/waste • Fully utilize F-IoT Become factories that carbon neutral manufacturing by continuous energy conservation and developing technologies DENSO DIALOG DAY 2021 / May 26th, 2021 7 / 00 © DENSO CORPORATION All Rights Reserved. ２ Mobility products Development of diverse technologies for EVs, HVs, FCVs, and e-VTOL

DENSO DIALOG DAY 2021 / May 26th, 2021 8 / 00 © DENSO CORPORATION All Rights Reserved. Basic Strategy for Mobility Products e-VTOL Electric propulsion system Achieve energy management from vehicles FCEV energy management system to infrastructure and contribute to carbon

neutrality by offering powertrain and Expanded Increased thermal systems freedom flexibility of of movement energy BEV energy management system (including e-Fuel and hydrogen burning) Hydrogen Engine HV energy management system e-Fuel Source: TOYOTA MOTOR CORPORATION

Achievement of Evolution of fun to drive reasonable mobility by using renewable energy Develop diverse technologies in anticipation of future needs, including HEVs, BEVs, FCEVs, and e-VTOL aircraft (air mobility)

Offer a lineup of systems and Energy products based on the Core management & Customization Strategy system

High-efficiency engine management system MG (including e-Fuel and DENSO Electrification Product Brand hydrogen burning) Inverter

Battery ECU

Air-conditioning Electric powertrain integration ECU & cooling system Connected system Offer a lineup of systems and products that cover a wide output range from small mobility vehicles to large trucks. The sales target for 2025 is 1 trillion yen.

■ Objective of entering the air mobility market ■ Efforts toward commercialization Aerospace → Automotive Refine technologies and use them for automobiles Lightweight and high-quality Systems, certification, Automotive → products sales channels (Away) Aerospace Develop air mobility • Production capacity (Home) • Electrification technologies in Connected to Propeller technologies anticipation of future • Production needs technologies → Use such technologies ■ Business fields for automobiles MaaS Operation management, systems, Electrification Motors, inverters, batteries, charging sharing, security, safety Motor (built-in Invertor) Deployment in Development of electric propulsion system Safety & cockpit all fields Automated driving, sensors, communication Thermal Air conditioning, heat pumps, Establish alliances heat exchangers, etc. Aim to achieve flight test in 2022 Contribute to the environment through the air mobility revolution and create a new main business

Development of technologies to capture and reuse CO2

③Energy use Renewable energy Energy conversion CO2Capture回収 CO₂ Electricity Hydrogen Fuel Gas Re-resourcing

Clean Energy・Recycle CO₂・Waste

①Manufacturing ② Mobility products Carbon cycle

CO2 CO CO CO2 CO2 2 2 CO2

CO CO2 Material CO2 Parts CO2 CO2 Produce cars 2 Use cars Waste

Develop key technologies toward an energy cycle society

Atmosphere CO2 emissions from 880 industries and households

Households~ 2.0 Renewable Energy Industry (e-Fuel) 6.2 CO2 cycle at Transport 8.3 factories

Factory CO₂ circulation

Power Artificial photosynthesis emissions emissions 2018 in [Gt/y] 2 generation Contribute through mobility HEV fuel Heat supply products activity Capture CO wherever necessary 14.0 2

heavy industries and steel → Use it as a renewable energy and Annual Annual CO Source: IEA Date Base manufacturers material Create a convenient, clean and comfortable society and lifestyles

“Green” Aim to achieve carbon neutrality (zero CO2 emissions) by 2035

Current Goal DENSO’s activities attainment Target Value proposition level

(1) Manufacturing Achieve zero CO₂ • Conserve energy through Reduce CO2 Achieve zero CO₂ emissions from factories production innovation and use emissions 1.9 emissions from renewable energy million ton factories • Introduce green energy from factories 2025: by using certificate and credits by 40% (from 2035: without using 2012 level) credits (2) Mobility Contribute to • Contribute to the electrification products electrification of vehicles field by offering systems/products 550 billion yen 1 trillion yen in (electrification) and minimize CO₂ (cover all fields: HEVs, BEVs, FCEVs, in revenue revenue (2025) emissions and e-VTOL) (3) Energy use Contribute to carbon • CO capture (use CO as a Start 2 2 Social demonstration (2025) neutrality of the entire renewable energy and material) demonstration Commercialization (2030) society by capturing and Photosynthesis, CO cycle at at the Anjo 2 300 billion yen(2035) reusing CO₂ factories Plant DENSO’s sustainability management: Solve social issues through business Business “Spread products and systems” × Solve social issues (environment) “Carbon neutral”

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