Japan has announced plans to provide up to $2.4 billion in subsidies to support the production of electric vehicle (EV) batteries, aiming to strengthen its battery supply chain. The government will back 12 projects related to storage batteries, including parts, materials, and production equipment, according to Ken Saito, Minister of Economy, Trade and Industry.
The move is expected to expand Japan’s annual battery production capacity by 50 percent, increasing it from 80 gigawatt-hours (GWh) to 120 GWh, Reuters news report said. Major recipients of the subsidies include Toyota Motor, Nissan Motor, and joint projects with Panasonic Holdings, Subaru, and Mazda Motor.
The recent IEA forecast indicates that the global battery production will remain close to EV demand centres through to 2030.
Toyota plans to invest around 245 billion yen to boost its battery production capacity by 9 GWh. This will include the development of solid-state and prismatic batteries through its subsidiaries Prime Planet Energy & Solutions and Primearth EV Energy, with production starting in November 2026 at new plants in Hyogo and Fukuoka.
Nissan will receive government certification and support for producing lithium-iron-phosphate batteries, targeting a domestic capacity of 5 GWh per year by 2028. The company will use these batteries in mini-vehicles, backed by up to 55.5 billion yen in subsidies.
Panasonic, which produces batteries for Tesla, will establish a new plant in Gunma prefecture to supply Subaru with cylindrical lithium-ion batteries by 2028. Panasonic will also begin supplying batteries to Subaru from a plant in Osaka prefecture by 2027. This joint venture represents a total investment of 463 billion yen, aiming for a production capacity of 16 GWh by 2030.
Additionally, Panasonic will produce EV batteries for Mazda from 2027 at its Suminoe and Kaizuka plants in Osaka, which Mazda will then package for use in its vehicles.
This latest round of subsidies follows previous government pledges, including nearly $1 billion in support for battery production last year and the first batch of subsidies in April 2023. Japan’s efforts are focused on bolstering its EV battery industry as global demand for electric vehicles continues to grow.