Japan raised support for production of storage batteries to up to US$2.2bn, the government reportedly said, pledging nearly $1bn in new subsidies for Toyota and other manufacturers as part of a push towards greater economic supply chain security.
A Reuter report said the move showed Tokyo was confident about ramping up battery production support after the US and Japan struck a deal on electric vehicle (EV) battery minerals in March that was key to giving Japanese automakers wider access to a new $7,500 US EV tax credit.
"As the international competition for storage batteries is intensifying, competition for capital investment is also becoming more intense," minister of economy, trade and industry Yasutoshi Nishimura told Reuters.
The government would support Toyota for up to JPY117.8bn (US$841m) in subsidies for its investment in EV battery production, Nishimura reportedly said, adding he hoped it would strengthen Japan's storage battery supply chain.
Toyota could provide no further details about the investment beyond those already disclosed by the ministry, a company spokesperson told the news agency.
The ministry reportedly said Toyota mass production of the batteries was expected to start in stages from October 2026 onwards.
Reuters noted the support came as Japan and other US allies try to secure supply chains away from China, which is a major player in EV batteries.
Japan has designated batteries for energy storage, including car batteries, as important under an economic security law, the report noted.
The news agency said support for Toyota amounted to just over a third of about JPY330bn in investment including for solid-state and lithium iron phosphate battery development with an annual production capacity of 25 gigawatt hours (GWh).
Part of that subsidy would be provided to three companies with which Toyota is working on battery development, including Toyota Industries.
The investment would bring annual production capacity in Japan to 45GWh, Nishimura told Reuters, adding the government wants to achieve domestic output capacity of 150GWh by 2030.
