Japan Wants to Subsidize Raw Materials for E-Cars

by | 24. Apr 2023 - 13:22 | Politics

Mining and processing of minerals such as lithium and rare earths will be heavily promoted.

The Japanese government wants to subsidize the mining and processing of lithium, rare earths, and other key minerals for the electric car industry. According to a report by Nikkei (paywall), the Ministry of Economy, Trade and Industry plans to support domestic companies with up to half of the costs for corresponding projects. To that end, the Japan Organization for Metals and Energy Security (Jogmec) has set up a 105.8 billion yen ($788 million) fund.

The measure is intended to reduce Japan’s dependence on China, the world’s largest producer of many critical minerals, and contribute to the goal of increasing domestic battery production sevenfold by 2030, Nikkei writes. Handelsblatt sees another factor in U.S. subsidy policies. Due to a recent agreement, raw materials for e-cars processed in Japan could be eligible for tax breaks under the Inflation Reduction Act.

Also thanks to further measures in the recent past, the island nation is significantly further along the path to resilient supply chains than other countries and is considered a role model for Germany, for example.

Photo: iStock/SeanPavonePhoto

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