Japan needs to be more competitive in manufacturing essential decarbonization goods

To achieve a decarbonized society, the diffusion of electric vehicles (EV) is essential. For this, high-performance storage batteries are also essential.

The public and private sectors should work together to further improve the international competitiveness of the Japanese storage battery industry.

The Ministry of Economy, Trade and Industry has developed an industrial strategy for storage batteries. The ministry has set a goal to increase the manufacturing capacity of Japanese manufacturers to 600 gigawatt hours by 2030. That’s more than 20 times the capacity that existed in 2020 and is equivalent to 14.4 million standard EV batteries, according to the Ministry.

To achieve this goal, the ministry intends to train 30,000 engineers and other personnel through collaboration between industry, universities and government. The ministry also said it would increase subsidies to encourage private investment in this regard.

Lithium-ion batteries for electric vehicles were originally a specialty area for Japan. Its global market share reached around 50% in 2015.

However, while Chinese and South Korean manufacturers have increased their technological prowess with the support of their governments, the share of Japanese manufacturers has fallen to around 20% in 2020. The Japanese government must accelerate the implementation of the strategy to recover lost ground.

In the past, Japanese companies also dominated the global semiconductor and liquid crystal panel market, but they have been overtaken by Taiwanese, Chinese and South Korean companies. As far as storage batteries are concerned, the Japanese government should learn from lessons learned from past experience so as not to repeat the same mistake.

The automotive industry has been working on the transition to electric vehicles. The key to the competitiveness of EVS lies in storage batteries, the heart of electric vehicles. Improving the quality and stability of battery supply will be a major challenge.

Toyota Motor Corp. announced that it will invest up to 730 billion yen in battery production in Japan and the United States. Nissan Motor Co. is considering buying a Japanese battery maker.

It is hoped that automakers in the country will endeavor to make active investments, in line with the government’s policy to make storage batteries a key area.

Improving storage battery technology is also essential for the expansion of renewable energy. Solar power and other renewable energy sources generate different amounts of electricity depending on weather conditions, and thermal power generation is used to make up the shortfall.

If energy can be stored in high capacity storage batteries, there will be much more room to use renewables.

European countries, the United States, China and South Korea are also strengthening their policy support for the storage battery industry, and competition is expected to intensify among these countries.

However, resources such as lithium and nickel, needed to manufacture storage batteries, are produced in limited quantities. It is inevitable that there will be fierce competition for these resources, the producers of which are located disproportionately in a few countries, including Chile, Australia and Indonesia.

A stable supply of materials for storage batteries is also important from the point of view of economic security. It is hoped that the Japanese government will not only take the initiative to find suppliers, but also focus on the development of alternative materials.

(From Yomiuri Shimbun, September 14, 2022)