Tokyo: Japan is set to increase its subsidies for electric vehicle (EV) battery production, pledging up to USD 2.4 billion for projects involving major companies such as Toyota Motor. This initiative aims to strengthen the country’s battery supply chain.

The government will support 12 projects related to storage batteries, including their components, materials, and production equipment, with funding of up to 350 billion yen (USD 2.44 billion), as announced by 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 funding is expected to expand Japan’s annual production capacity for storage batteries by approximately 50%, increasing it from 80 gigawatt-hours (GWh) to 120 GWh. The government support includes investments from Toyota, Nissan Motor, and joint projects by Panasonic Holdings’ energy unit in collaboration with automakers Subaru and Mazda.

This announcement follows a previous commitment of nearly USD 1 billion in subsidies for storage battery production made in June of the previous year, as well as an initial round of subsidies in April 2023.

Toyota plans to invest around 245 billion yen through its battery subsidiaries, Prime Planet Energy & Solutions and Primearth EV Energy, to enhance production capacity for solid-state and prismatic batteries by 9 GWh. The company is expected to begin supplying these batteries in November 2026, with plans to construct battery plants in Hyogo and Fukuoka prefectures.

Nissan has received government certification for a plan to produce lithium-iron-phosphate batteries, targeting installation in mini-vehicles starting in the 2028 business year. The automaker aims for a domestic production capacity of 5 GWh per year, qualifying for up to 55.5 billion yen in government support.

Additionally, Panasonic’s energy unit and Subaru announced plans to establish a plant in Gunma prefecture for cylindrical lithium-ion battery production, set to begin in the 2028 business year. Panasonic Energy will also supply Subaru with batteries from a plant in Osaka prefecture starting in the 2027 business year. The total investment for the Gunma plant is estimated at 463 billion yen, targeting an annual production capacity of 16 GWh by 2030, with an additional 4 GWh supplied from the Osaka facility.

Panasonic Energy will also produce EV batteries at its Suminoe and Kaizuka plants in Osaka for Mazda, starting in 2027, with further details outlined in a joint statement from the companies.

This initiative underscores Japan’s commitment to enhancing its domestic battery production capabilities, which is essential for supporting the growing electric vehicle market and reducing reliance on imports.

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