Japan offers domestic firms $840 mn to strengthen battery chain

Japan has announced the country will give Toyota and others up to $840 million in subsidies to boost domestic production of batteries for electric vehicles and storage.

Industry Minister Yasutoshi Nishimura told reporters that competition for capital investments was becoming intense amid the competition between countries for storage batteries.

"Large-scale investments by Toyota group and so on will hopefully lead to a significant strengthening of our country's supply chain for storage batteries," the minister told the press, Reuters reports. Nishimura said he expected the amount would take Japanese domestic battery production capacity to 45 gigawatt hours (GWh).

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Japan is targeting domestic production capacity of 150 GWh by 2030. The country has designated batteries, both for energy storage and for EVs, important under an economic security law and earmarked 332 billion yen (just below $2.4 billion) for incentives. The country's Ministry of Economy, Trade and Industry (METI) says up to a third of that, equating to about $840 million, will be deployed for development of next-generation solid-state batteries and lithium iron phosphate batteries.

It said the subsidy will be provided to Toyota and three other companies with which it is working on battery development, including Toyota Industries. The batteries are expected to go into mass production from October 2026 onwards.

Toyota said the company could not provide any details beyond that was disclosed by the government. Earlier this week, the company outlined a plan to redesign factories and install new technology as part of its strategy to capture market share in the EV sector.