On September 6, the Japanese government announced that it will increase subsidies for the production of electric vehicle batteries, pledging up to $2.4 billion in support for major companies such as Toyota to strengthen their battery supply chain.
Economic, Trade and Industry Minister Ken Saito stated that the government will support 12 energy storage battery projects and their components, materials, or production equipment, with subsidies totaling up to 350 billion yen (about $24.4 billion).
“We hope that these efforts will enhance the competitiveness of Japan’s energy storage battery supply chain and industry,” said Saito.
Japanese media reported earlier on Friday that this move will expand the country’s annual production capacity of energy storage batteries by approximately 50%, from the current 80 gigawatt-hours (GWh) to 120 GWh.
Saito also mentioned that the government’s support includes investment support for Toyota and Nissan, as well as support for Panasonic’s energy division and joint projects with automakers Subaru and Mazda.
This subsidy announcement marks the third batch of subsidies provided by the Japanese government to the energy storage battery production industry in a little over a year. Last April, the government provided the first batch of subsidies for this industry, with a promise to increase subsidies by an additional $1 billion in June of last year.
The Ministry of Industry in Japan stated that Toyota, along with its two battery subsidiary companies, will collectively invest around 245 billion yen (about $1.715 billion) to increase the production capacity of solid-state and prism batteries by 9 GWh. The company plans to start supplying these batteries in November 2026.
Toyota confirmed in a statement that the ministry has certified its next-generation solid-state battery development and production plans but did not disclose the investment amount or information about new factories.
Nissan, in a statement, mentioned that it has received government certification for its lithium iron phosphate battery production plans.
Nissan plans to install these batteries in mini-vehicles starting in the 2028 fiscal year, with a domestic production capacity goal of 5 GWh per year, supported by up to 55.5 billion yen (about $390 million).
Panasonic and Subaru stated in a joint announcement that they will establish a factory in northern Tokyo to supply cylindrical lithium-ion batteries starting in the 2028 fiscal year. Panasonic’s energy division currently produces batteries for Tesla.
These two companies indicated that Panasonic Energy will begin supplying these batteries to Subaru from a factory in Osaka prefecture starting in the 2027 fiscal year. The total investment is 463 billion yen (about $3.24 billion), with the goal of achieving an annual production capacity of 16 GWh by 2030 at this factory and 4 GWh per year at the Osaka facility.
Furthermore, Panasonic Energy will produce electric vehicle batteries for Mazda at its two factories in Osaka starting in 2027. Mazda will handle the packaging.