Japan to provide new subsidies for domestic production of electric car batteries

TOKYO (Reuters) – Japan will provide more subsidies for the production of batteries for electric vehicles, pledging as much as $2.4 billion in support for related projects by Toyota Motor and other major companies in a bid to bolster its battery supply chain.

The government will support 12 projects involving storage batteries or parts, materials or production equipment with up to ¥350 billion ($2.44 billion), Minister of Economy, Trade and Industry Ken Saito told reporters.

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

The move will expand the country’s storage battery production capacity by about 50% from 80 GWh to 120 gigawatt-hours (GWh), Japanese media reported earlier on Friday.

The government support included backing for investments by Toyota, Nissan Motor and joint projects that Panasonic Holdings’ energy division would carry out with automakers Subaru and Mazda respectively, Saito said.

The latest support comes after the government pledged nearly $1 billion in subsidies for storage battery production in June last year.

Toyota would invest a total of ¥250 billion in two subsidiaries to build battery factories in Hyogo and Fukuoka prefectures.

However, a Toyota spokesman said the automaker has not yet made any announcements about such projects, although he said the company is making several efforts to increase its production capacity for electric vehicle batteries.

Nissan said in a statement that it has received government approval for a plan to produce lithium iron phosphate batteries.

The automaker plans to install such batteries in mini-vehicles from fiscal 2028, targeting a domestic production capacity of 5 GWh, for which it would receive up to ¥55.5 billion in support, the company said.

Panasonic said it could not comment further than previously made announcements, while Subaru and Mazda did not respond to requests for comment.

Panasonic’s energy division, which also makes batteries for Tesla, previously signed a deal to supply automotive batteries with Mazda and another deal with Subaru.