Japan to boost local electric car battery production
The Japanese government will promote local production of electric car batteries. It has allocated US$2.4 billion for this purpose. The funds will go towards increasing production at major car companies such as Toyota and Nissan. The programme also includes Panasonic’s projects with Subaru and Mazda. Parts and equipment manufacturers are also included.
A total of 12 projects will be included in the government’s stimulus package. They include:
– battery production;
– battery components;
– materials for battery production;
– manufacturing equipment.
Economy Minister Ken Saito hopes that such an initiative will improve the supply chain of electric car components. In addition, Japan aims to strengthen its position as a major battery manufacturer in the global market. According to analysts, the funds earmarked will allow battery production in the country to increase by 50%, equivalent to 120 GWh. Japan’s current production is 80 GWh. This is expected to reach 150 GWh by 2030.
It is worth noting that in addition to government funding, car companies are also investing in the sector. Toyota plans to invest 245 billion yen to increase battery production. The funds will go to the company’s subsidiaries, Planet Energy & Solutions and Primearth EV Energy. The company intends to focus on the production of solid-state and prismatic batteries and increase production volume by 9 GWh.
To achieve this goal, Toyota is building plants in two regions of Japan. The first deliveries of new products are expected at the end of 2026. The company is also building plants in the USA. The project started in 2022, and the investment in the plants amounted to 5.3 billion dollars.
The carmakers’ total investment is around US$7 billion. The funds will be used to expand production until 2028. State investment accounts for about 30% of the planned amount.
Sector trends
China and South Korea are currently the leading producers of electric car batteries, accounting for 90% of the market. Japan is looking to strengthen its position in this sector. Local companies are striving to meet climate targets. To this end, car manufacturers are stepping up their efforts to achieve zero emissions. Toyota, for example, plans to stop selling petrol and diesel cars in Europe by 2030. Instead, it is expanding its range of electric and hybrid cars.
Notably, global carmakers are positive about the electric transport market. All the major groups are investing in battery production to reduce their dependence on suppliers. This will also allow them to remain more competitive in a market that is moving towards carbon neutrality.
