The Japanese government plans to provide up to JPY 350 billion ($2.45 billion) in subsidies to support domestic electric vehicle battery development, Kallanish reports.

The country’s Ministry of Economy, Trade and Industry (METI) approved 12 projects by battery and car manufacturers Toyota, Nissan, Panasonic, Subaru and Mazda. These projects have a combined investment value of JPY 1 trillion, according to the government.

“We expect the subsidy will contribute to strengthening Japan’s storage-battery supply chain and improve the industry’s competitiveness,” says industry minister Saito Ken.

The scheme will help expand Japan’s annual battery production capacity by around 50% to 120 GWh from 80 GWh, METI says. This will contribute to Tokyo’s goal of increasing domestic battery production capacity to 150 GWh by 2030.

Nissan confirmed it will receive JPY 55.7 billion in subsidies to build a 5 gigawatt-hour lithium iron phosphate (LFP) battery manufacturing plant. The JPY 153.3 billion project will produce batteries for light electric vehicles in fiscal year 2028.

In a separate statement, Toyota announced its METI-certified project will target an annual production scale of 9 GWh, with volumes increasing gradually from 2026. This will cover next-generation batteries (performance version) and all-solid-state batteries. The carmaker did not specify how much it will get from the government.

In a joint announcement, Mazda and Panasonic Energy unveiled they will receive around JPY 28.3 billion in subsidies for their JPY 83.3 billion project. The joint venture will see the production of cylindrical automotive lithium-ion batteries, with an annual capacity of 6.5 GWh.

As part of this collaboration, Panasonic aims to increase its production capacity and plans to produce such batteries at its Suminoe and Kaizuka factories in Osaka from 2027 onwards. These will be module-packaged by Mazda. Panasonic Energy plans to achieve a domestic production capacity of 10 GWh annually for this collaboration by 2030. 

The battery manufacturer, a long-time supplier to Tesla, also announced in a joint statement with Subaru a new 16 GWh gigafactory in Oizumi, Gunma prefecture, north of Tokyo. The plant will receive JPY 156.4 billion in subsidies, for an investment of JPY 463 billion. Production of the cylindrical cells is slated to start in fiscal 2028.

Subaru says it’s targeting all-electric cars to make up 50% of its 1.2 million global sales in 2030. As part of this goal, it will start procuring 4 GWh of cylindrical lithium-ion batteries from Panasonic’s Suminoe factory from fiscal 2027. In total, procurement will reach 20 GWh by 2030.