The Japanese government has announced its plans to provide subsidies of up to $1.8 billion for projects related to storage batteries and chips, as part of Tokyo's latest effort to secure its supply chains. Industry Minister Yasutoshi Nishimura revealed that the government will subsidize up to 184.6 billion yen ($1.38 billion) for eight storage battery-related proposals and up to 56.4 billion yen for two semiconductor-related projects.
Among the proposals that the government will subsidize is a joint plan by Honda Motor and battery maker GS Yuasa to invest around 430 billion yen to increase the production of storage batteries. The ministry will provide up to 158.7 billion yen in subsidies for the project. In a statement, Honda, GS Yuasa, and battery maker Blue Energy announced plans to commence production in April 2027, with mass production scheduled for October of the same year. The companies plan to construct a new plant with a production capacity of at least 20 gigawatt hours, but did not disclose the location or further details.
Industry Minister Nishimura expressed high hopes that the initiative would lead to a stable supply of storage batteries and promote green transformation. The Nikkei newspaper also reported that Honda and GS Yuasa will collaborate to produce batteries for electric vehicles and homes.
The Japanese government's latest announcement is in line with its efforts to ensure a stable supply of crucial materials and components amid the pandemic and geopolitical tensions. The COVID-19 pandemic has exposed the vulnerability of global supply chains, leading countries to take steps to secure their supplies of critical goods. Japan, like other countries, is seeking to reduce its reliance on China, which accounts for a significant share of its supplies of rare earth metals, a key component of high-tech products.
The subsidies for storage battery and chip-related projects are expected to further bolster Japan's push towards green transformation and help the country achieve its goal of carbon neutrality by 2050. The move also aims to support the domestic industries and spur technological innovation.