Toyota and Nissan Boost Japan's EV Battery Capacity to Compete with China and South Korea

Toyota and Nissan will spend $7 billion to raise Japan’s EV battery production by 50%, seeking to reduce reliance on China and South Korea as global leaders in the electric vehicle battery market.

Toyota, Nissan to Invest $7 Billion in EV Batteries

Japanese corporations will spend $7 billion (1 trillion yen) to increase the country's production of electric vehicle batteries, with Toyota and Nissan among them.

In an effort to diversify its supply chain away from the present market dominance by South Korea and China, the Japanese government will lend a hand.

Japan Falling Behind in Electric Vehicle Adoption

When it comes to the transition to electric vehicles, Electrek claims that Japan is one of the countries that has lagged behind. Early this year, sales of electric vehicles in the United States dropped by 39%.

The Japan Light Motor Vehicle and Motorcycle Association reports that domestic passenger EV sales were 29,282 units in June 2024, representing a 39% decrease compared to the previous year. From the first half of 2023 to the second, the percentage of passenger car sales that were electric vehicles fell from 0.7% to 1.6%.

Foreign Competition Harming Japan's EV Industry

The absence of alternatives is a major factor. A representative from the Japan Automobile Importers Association (JAIA) told Argus that foreign names are destroying the Japanese electric vehicle (EV) market.

Japanese corporations, such as Toyota and Nissan, are pouring resources into establishing a reliable supply chain for electric vehicle batteries.

Nikkei reports that a number of Japanese corporations, including Toyota and Nissan, will spend a combined $7 billion (1 trillion yen) to increase output of storage batteries by almost 50%.

Japan Targets 150 GWh EV Battery Output by 2030

Production would increase from 80 GWh to 120 GWh with the help of the funds. The target is to achieve 150 GWh by the year 2030. The Japanese government is planning to announce soon that it will be allocating up to $2.44 billion, or 350 billion yen, to the cause.

The research states that Japan is trying to ensure a steady supply of EV batteries since China and South Korea are the market leaders.

With intentions to increase battery production at two subsidiaries, Toyota is anticipated to spend approximately $1.7 billion, or 250 billion yen. Also, by 2029, Toyota plans to have a brand new electric vehicle battery plant up and running, which will supply the next Lexus EVs.

Nissan intends to start producing LFP batteries in 2028 after investing approximately $1 billion (150 billion yen).

In an effort to increase domestic production, Subaru and Mazda have partnered with Panasonic, a Japanese company, to manufacture electric vehicle battery components. Around $3.8 billion, or 550 billion yen, is what it is anticipated to put in.

China's EV Batteries Lead the Global Market

Updated statistics from SNE Research show that Chinese EV batteries continue to dominate the international market. As of July 2024, CATL held a dominant 37.6% share of the market, with BYD in second place with 16.1%.

Third and fourth, respectively, with 12.4% and 4.7% of the market, were South Korean companies LG Energy Solution and SK On.