Japan's Power Market News 2023/W46

GX committee sets out production targets and projections for battery and mobility sectors

On November 8, the expert working group on GX policy implementation met to discuss the government’s investment strategies for the #battery and #mobility sectors. The meeting was one of several that the committee has held to formulate ways to practically implement the GX Promotion Act that was passed earlier this year. (Read more about the GX Promotion Law in our blog post here .)

Recognizing that batteries and #automobiles are both critical for Japan’s global competitiveness and #energy security, the expert group’s meeting had the following takeaways.

Batteries

Aware that China and South Korea have become dominant in the global battery market over the last few years, Japan aims to expand lithium-ion battery manufacturing and supply chains, particularly for #EVs.

For Japan to become competitive, it will need to:

1. Maintain product quality
2. Scale up production to lower cost

To this end, the working group suggested four targets to aim for by 2030:

• Create a domestic battery production capacity of 150GWh
• Establish a global battery production capacity of 600GWh
• Commercialize solid-state batteries to capture the next-generation battery market
• Continue to closely collaborate with partner countries to establish secure supply chains

The government projects that, over the next 10 years, public-private investments in battery manufacturing will reach JPY 7 trillion (USD 46 billion). Over the last several months, the government has selected three battery manufacturing projects and twelve battery materials projects as targets for this investment.?

Mobility

Japanese car makers’ hold about one-third of the global passenger vehicle market. In Japan, #emissions from the mobility sector account for 15.1% of the country’s total #carbon emissions. As with batteries, the challenge is to strengthen competitiveness while #decarbonizing the mobility sector.

Japan’s strategy is to pursue all zero-emission vehicles, but a clear priority is supporting the production, demand, and infrastructure for passenger EVs. The government will commit to:

• Make 100% of new car sales zero-emission vehicles by 2035 (EVs, hybrids, hydrogen fuel cell vehicles, and synthetic/biofuel cars)
• Increase the number of charging stations to 300,000 by 2030 (The previous target was 150,000 by 2030)
• Secure sufficient #EV battery supply by strengthening supply chains and supporting domestic manufacturing

All said, the government aims for JPY34trillion (USD 224 billion) in public-private investments in clean mobility over the next ten years

In both batteries and mobility, the government’s preference is to support the supply side. Working group discussions center around various incentives and subsidies to expand production, particularly by Japanese firms. While it also outlined several measures to increase demand, these are not thought to have the same targeted impact as supply-side subsidies.?

On top of this, the government asserts that its battery and mobility strategies will significantly contribute to avoiding carbon emissions, although it did not provide detailed figures.

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