Honda Motor Co. and battery maker GS Yuasa Corp. are considering jointly building a new factory in Japan to produce lithium-ion batteries for electric vehicles, with potential investment of about 400 billion yen ($3 billion), according to sources familiar with the matter.
The envisaged plant would be eligible for government aid aimed at promoting battery production in Japan in the face of rising global competition over all-electric vehicles, the sources said Thursday.
The two companies announced in January that they will establish a joint venture for EV batteries.
The announcement followed the Japanese government's designation in December of semiconductors and batteries among critical materials as part of efforts to boost economic security in high-tech and other strategically important sectors.
China has been a major supplier of EV batteries, with Contemporary Amperex Technology Co. and BYD leading manufacturers.
Honda earlier this week announced a series of measures to accelerate the expansion of its EV business, including a tie-up with Taiwan Semiconductor Manufacturing Co. to strengthen its chip procurement, as it seeks to catch up with leading EV manufacturers.
The Japanese carmaker also said it will launch four EV models in Japan by 2026, including a compact sport utility vehicle and two types of minivehicles modeled after the N-VAN and the N-ONE.
