Japan's Minister of Economy, Trade and Industry, Ken Saito, stated to the media that the Japanese government will support 12 power battery projects or related component, material, and production equipment projects, with subsidy funds reaching up to 350 billion yen. The hope is that these efforts will enhance the competitiveness of Japan's EV battery supply chain. This move will increase Japan's annual EV battery production capacity by 50% from the current 80 GWh to 120 GWh.

A total of 12 projects will receive subsidies, with the main beneficiaries including Toyota Motor Corporation, Nissan Motor Corporation, and Panasonic Energy, among other electric vehicle industry chain enterprises.

Toyota plans to invest approximately 245 billion yen (~12.2 billion RMB) with its battery subsidiaries, Prime Planet Energy & Solutions (PPES) and Primearth EV Energy (PEVE), to build battery factories in Hyogo and Fukuoka prefectures, increasing the production capacity of solid-state and prismatic batteries by 9 GWh, with plans to start production in November 2026. The Ministry of Economy, Trade and Industry will provide approximately 85.6 billion yen (~4.2 billion RMB) in subsidies for this.

Panasonic Energy, one of the key battery suppliers for Tesla, in a joint statement with Subaru, announced the construction of a factory in Gunma, north of Tokyo, to supply cylindrical batteries for Subaru starting from the fiscal year 2028. Additionally, Panasonic will begin supplying Subaru with batteries from an Osaka factory from the fiscal year 2027. The two factories aim to reach an annual production capacity of 16 GWh at the Gunma factory and 4 GWh at the Osaka factory by 2030, with a total investment of 46.3 billion yen (~2.3 billion RMB).

This is not the first time the Japanese government has provided subsidies to the power battery industry chain. It is reported that the Ministry of Economy, Trade and Industry has identified electric vehicle batteries as "important materials for ensuring economic security" and has ensured 330 billion yen (~16.4 billion RMB) in the second supplementary budget for 2022 for the research and supply of batteries; in April 2023, it provided about 160 billion yen (~8 billion RMB) in subsidies for the lithium battery investment plans of Honda and Yuasa; in June 2023, it announced a subsidy of about 120 billion yen (~6 billion RMB) for Toyota's investment in power lithium batteries in Japan.