Japan unveils subsidy to incentivise battery production

Japan will provide subsidies to businesses that take part in building domestic lithium-ion battery production facilities, either for use in electric vehicles (EVs) or storage systems.

These subsidies will start from late April, the trade and industry ministry's (Meti) battery industry office said in its strategy guidelines released in late January. The ministry is looking to allocate a total of ¥332bn ($2.6bn) for this purpose, aimed at ensuring a stable battery supply chain in the country.

A facility should be capable of producing more than 3 GWh/yr of EV batteries and more than 300 MWh/yr of storage batteries to qualify for the subsidies. Japan in December 2022 included storage batteries in its list of 11 items that are deemed essential for ensuring the country's economic growth, as they are necessary to expand the use of EVs and renewable electricity in line with the country's goal to achieve a net-zero society by 2050.

The subsidies will be disbursed through state-owned research agency Nedo after approval from Meti, which expects to deliver its first round of approvals around late April.

By Yusuke Maekawa