Japan once led the field of lithium-ion storage batteries, with chemist Akira Yoshino developing the first commercially viable model in 1985. Now the nation is having to ratchet up support for the industry, which is falling behind Chinese and South Korean players in the global market.
“Japan’s EV market must grow. Domestic carmakers bear the most responsibility” for helping the storage battery industry get back on its feet, said Yoshino, who won the 2019 Nobel Prize in chemistry, in a recent interview with Nikkei Asia.
Japanese carmakers have been slow to embrace the global shift from gasoline and diesel vehicles to EVs, lagging behind foreign brands like Tesla of the US, Germany’s Volkswagen and China’s SAIC Motors. Top Japanese automaker Toyota continues to draw criticism from investors and environmentalists over its reluctance to adopt fully electric models.
The nation calls storage batteries “one of the most important technologies” for achieving carbon neutrality by 2050.
Prime Minister Fumio Kishida has repeatedly referred to them in his speeches, most recently last month. As part of his US$200 billion economic package against inflation, he promised to “strengthen” the nation’s ability to supply storage batteries and support the introduction of industrial electric vehicles.
His comments came after the government announced in August a new strategic plan focusing on repowering its battery industry, voicing concern that “Japanese companies may become exhausted and withdraw from the market” under current conditions.
Initially used to power mobile electronic devices, lithium-ion batteries now go primarily into electric vehicles – an area where Japan is rapidly losing ground.
In 2015, the global market for EV batteries was led by Japan with 52% of the share, followed by China at 27% and South Korea at 14%. Five years later, it is China that leads with 37%, followed close behind by South Korea with 36% and then Japan, dropping to 21%, according to the government, based on research by Fuji Keizai.
Japan’s faltering leadership “couldn’t be helped” because its domestic market for electric vehicles has been the slowest among the major battery producers to expand, said Yoshino.
Data from the International Energy Agency shows that in China and South Korea, electric cars accounted for 16% and 6% of domestic car sales in 2021, respectively increasing 18-fold and 30-fold from 2015. Japan, however, only saw 1% of market share in 2021, barely increasing from 0.6% in 2015.
“You can never start developing batteries if you don’t have customers in your own country,” said Yoshino, who now heads the Global Zero Emission Research Center, a national research base for zero-emission technologies.
The rise of electric vehicles, combined with an appeal for resilience in supply chains, has pushed the battery battlefield beyond Asia. The European Union, which will phase out non-electric vehicles by 2035, and the US, where Tesla has paved the way for EVs, have been implementing tax breaks and control measures to build intraregional battery supply chains and boost technological development.
Efforts to develop battery technology in such regions are “going very smoothly” thanks to ample funding but are “stumbling” at the step of taking the technology to mass production and becoming commercially viable, noted Yoshino.
“Mass-production technology is an area Japan has strength in,” he said. Yoshino’s Nobel-winning achievements were also recognised in this regard as enabling the efficient production of lithium-ion batteries.
Yoshino sees a “second chance” for his country to regain competitiveness coming in 2025, when “a substantial boost in EV sales will start to trigger even more battery demand”. As rising geopolitical tensions prod countries to build supply chains with allies, Japan must be ready to stably answer the demand, he said.
The strategy released in August will be key to “at least get a chance” of winning. It includes a target to establish a domestic manufacturing base for batteries and materials totalling 150 gigawatt-hours per year by 2030 at the latest. It also aims to increase manufacturing capacity in the global market by tenfold to 600 GWh in 2030, which would amount to a 20% share.
Measures to work toward the goals include ramping up investment and strengthening strategic cooperation with allies, not to mention promoting electric vehicles to generate domestic demand – which Yoshino sees as “most important”.
“It’s unclear whether Japan can win the upcoming battle,” but the new strategy will “at least create a chance” for the nation’s battery industry to rise again, said Yoshino.