Japan Boosts Electric Vehicle Battery Production Subsidies

TOKYO (Reuters) – Japan will increase subsidies for electric-vehicle battery production, committing up to $2.4 billion for projects by major companies like Toyota Motor.

The government aims to strengthen its battery supply chain by supporting 12 projects related to storage batteries, parts, materials, or production equipment with a budget of up to 350 billion yen ($2.44 billion), according to Minister of Economy, Trade and Industry Ken Saito.

“We hope that these efforts will strengthen Japan’s storage battery supply chain and the storage battery industry’s competitiveness,” Saito stated.

This initiative is expected to enhance Japan’s annual production capacity for storage batteries by approximately 50%, raising it to 120 gigawatt-hours (GWh) from the current 80 GWh.

The support will include investments from Toyota, Nissan, and collaboration with Panasonic, which will run joint projects with Subaru and Mazda.

This support follows the government’s prior pledge of nearly $1 billion in subsidies for battery production announced in June last year and a first batch of subsidies in April 2023.

Toyota plans to invest around 245 billion yen in its battery subsidiaries Prime Planet Energy & Solutions and Primearth EV Energy to enhance their production capacity for solid-state and prismatic batteries through an additional 9 GWh. Production is set to commence in November 2026 with new plants in Hyogo and Fukuoka.

While Toyota confirmed certification for its battery plans, it has not disclosed specific investment figures or new plant details.

In a separate statement, Nissan announced government certification for producing lithium-iron-phosphate batteries, targeting a 5 GWh domestic production capacity for mini-vehicles by the 2028 business year, supported by up to 55.5 billion yen.

Meanwhile, Panasonic’s energy unit is set to establish a plant in Gunma prefecture to produce cylindrical lithium-ion batteries for Subaru by the 2028 business year. They aim for a total investment of 463 billion yen, with 16 GWh production capacity expected by 2030.

Additionally, Panasonic will make EV batteries for Mazda starting in 2027 from its Suminoe and Kaizuka plants in Osaka.

($1 = 143.1600 yen)