Asian finance newspaper, The Nikkei reports Thursday that Japan will give Toyota Motor Corporation (NYSE:TM) around ¥120 billion (¥1 = $0.0071) ($854 million) in support towards the Japanese automaker’s plans to invest in the domestic production of lithium ion batteries used in electric vehicles.
Earlier this week, Toyota laid out its plans to adopt new technology and redesign factories, sending its clearest signal yet of its intention to capture a larger share of the fast-growing battery electric vehicle segment.
The government help comes as Japan and other U.S. allies are increasingly looking to secure supply chains away from China, which is a major player in EV batteries.
According to the Nikkei, Japan's trade ministry has recognized the significance of storage batteries, including car batteries, for economic security. As a result, they have allocated ¥330 billion in their second supplementary budget to aid their supply and advancement.
According to the newspaper, the government plans to provide financial support for capital expenditure and technological development, covering one-third and half of the expenses, respectively. In the case of Toyota, the total subsidized amount for the project is expected to reach ¥330 billion.
Shares of TM are up 1.74% in afternoon trading on Thursday.