Honda, GS Yuasa to build Japanese battery factory in $3bn push

TOKYO -- Honda Motor and Japanese battery maker GS Yuasa will invest over 400 billion yen ($2.99 billion) to develop and mass-produce cells for electric vehicles and homes in Japan through a joint venture to be set up this year, Nikkei has learned.

As a first step, the companies will construct a domestic lithium-ion battery factory with a target capacity of 20 gigawatt-hours or more.

Japan's Ministry of Economy, Trade and Industry will provide a roughly 150 billion yen subsidy to help the companies' efforts.

Many battery-related companies so far have invested heavily in China, the world's largest EV market, and the U.S., which is ramping up efforts to woo businesses. Japan aims to bolster its competitiveness in the field by supporting domestic production, concerned it could lose critical technology and industrial infrastructure to these markets.

Honda and GS Yuasa plan to collaborate not only on battery production through the new venture, but on sales and other business operations as well.

The Japanese government in December designated storage batteries as a strategically critical product, and see domestic development and production as key to economic security. Honda and GS Yuasa will be the first to receive battery-related subsidies under this designation.

METI set aside 330 billion yen to support domestic battery production and development in the second supplementary budget for fiscal 2022, and plans to extend assistance to other manufacturers.