Japan Plans US$2.4 Billion Investment for EV Battery Production

Japan is set to invest up to US$2.4 billion to enhance its electric vehicle (EV) battery production capabilities, according to a statement from Minister of Economy, Trade, and Industry Ken Saito. This new round of subsidies aims to support 12 projects involving storage batteries, including their parts, materials, and production equipment.

The investment will boost Japan’s annual battery production capacity by approximately 50%, increasing it from 80 gigawatt-hours (GWh) to 120 GWh. This move is part of Japan's broader strategy to strengthen its battery supply chain and enhance the competitiveness of its storage battery industry as reported by Reuters.

Among the beneficiaries of this funding are major companies such as Toyota, Nissan, Panasonic Holdings, Subaru, and Mazda. Toyota plans to invest significantly to expand its production capacity for solid-state and prismatic batteries, with a goal to start supplying these batteries from November 2026. New plants will be constructed in Hyogo and Fukuoka prefectures.

Nissan is focusing on producing lithium-iron-phosphate batteries and plans to integrate these into mini-vehicles starting in the 2028 business year, targeting a domestic production capacity of 5 GWh per year.

Panasonic Energy, which supplies batteries for Tesla, will collaborate with Subaru to establish a new facility in Gunma prefecture. This plant will focus on cylindrical lithium-ion batteries and aims for a production capacity of 16 GWh annually by 2030. Another 4 GWh per year will be supplied from a plant in Osaka prefecture. Additionally, Panasonic will supply Mazda with EV batteries from its Suminoe and Kaizuka plants in Osaka starting in 2027.

This initiative follows Japan's previous commitment to invest in storage battery production subsidies announced in June of the prior year and an earlier batch of subsidies from April 2023.