Japan to roll out $2.4 bn subsidies to support EV battery manufacturing

Japan pledges to roll out $2.4 billion worth of subsidies for electric-vehicle battery manufacturing to support projects by Toyota Motors and many more companies who are seeking to make their battery supply chain stronger. 

According to Minister of Economy, Trade, and Industry Ken Saito, the government would provide up to 350 billion yen ($2.44 billion) in support for 12 projects involving storage batteries, their parts, materials, or production equipment.

"We hope that these efforts will strengthen Japan's storage battery supply chain and the storage battery industry's competitiveness," Mr. Saito said.

The update is likely to increase the country's yearly storage battery manufacturing capacity by around 50% to 120 gigawatt-hours (GWh), up from the present 80 GWh, according to Japanese media reports.

The government's aid includes Toyota and Nissan Motor's investments, as well as collaborative initiatives between Panasonic Holdings' energy business and automakers Subaru and Mazda Motor, Saito further underlined.

The update comes after the government offered about $1 billion in subsidies for storage battery manufacture in June of last year, with the first batch set to begin in April 2023.

Toyota will invest around 245 billion yen alongside its battery subsidiaries, Prime Planet Energy & Solutions and Primearth EV Energy, to increase solid-state and prismatic battery production capacity by 9 GWh, according to the industry ministry.

According to reports, Toyota will begin shipment of the batteries in November 2026. According to the Yomiuri newspaper, the idea is to develop battery facilities in the prefectures of Hyogo and Fukuoka.

Nissan announced in a statement that the government has approved their proposal to build lithium-iron-phosphate batteries.

The automaker planned to install such batteries in mini-vehicles beginning in the fiscal year 2028, with a domestic manufacturing capacity of 5 GWh per year and up to 55.5 billion yen in assistance, according to the statement.

Moreover, Panasonic's energy unit, which manufactures batteries for Tesla, and Subaru said in a joint statement that they will establish a factory in Gunma prefecture, north of Tokyo, to provide cylindrical lithium-ion batteries beginning in the fiscal year 2028.