Japan Pledges RM10.2 Billion to Expand EV Battery Production

With a new US$2.4 billion (RM10.2 billion) subsidy scheme, Japan is extending its support for the production of electric vehicle (EV) batteries with the goal of bolstering the nation's battery supply chain.

According to Ken Saito, Minister of Economy, Trade, and Industry (METI), this financing will support 12 initiatives (chosen in the table below) that are focused on creating storage batteries, their parts, materials, or manufacturing equipment.

The program is a component of Japan's larger plan to increase domestic battery production capacity to 150 GWh annually by 2030. The nation's output is currently 85 GWh annually; these new projects are anticipated to raise it to 120 GWh.

According to METI, Japan will require significant quantities of critical raw materials to reach the 150 GWh objective. It includes 100,000 tonnes of lithium, 90,000 tonnes of nickel, 150,000 tonnes of graphite, and 20,000 tonnes each of cobalt and manganese.

In comparison, BloombergNEF reported recently, China alone currently outputs over 900GWh per year in battery production.

Saito, according to Reuters, expressed confidence that these efforts will enhance Japan's battery supply chain and the competitiveness of its storage battery industry. The government’s backing includes investments by major automakers such as Toyota and Nissan, as well as joint ventures between Panasonic and Subaru, and Panasonic and Mazda.

Through its subsidiaries Prime Planet Energy & Solutions and Primearth EV Energy, Toyota intends to invest about US$1.7 billion (RM7.4 billion) to boost its production capacity for solid-state and prismatic batteries by 9 GWh. Beginning in Nov 2026, factories in the prefectures of Hyogo and Fukuoka will manufacture batteries for Toyota.

This latest round of subsidies adds on to Japan's earlier commitment of nearly US$1 billion (RM4.3 billion) for battery production in April and June 2023.