Honda Motor and battery maker GS Yuasa are planning to jointly build a new facility in Japan to produce electric vehicle (EV) batteries, with an investment of nearly Y400bn ($3bn), reported Nikkei.

The Japanese companies will form a joint venture (JV) to construct a lithium-ion battery factory.

People familiar with the development report that the proposed facility is expected to have a production capacity of at least 20GWh.

According to Nikkei, a JV that the companies formed in January 2023 will be crucial in the development of batteries, materials, and capital investment.

Furthermore, the Japanese Government would pay Y159bn ($1.2bn) in subsidies to Honda Motor and GS Yuasa to help their efforts to produce batteries.

Japanese Trade Minister Yasutoshi Nishimura was quoted by Bloomberg as saying: “We will keep taking steps to have a stable supply of semiconductors and batteries.”

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The companies intend to begin mass-producing high-capacity, high-storage batteries in 2027, with a line scheduled to start up in April and reach full production in October, according to Bloomberg.

The businesses are considering Shiga prefecture as a location for the battery plant.

In November 2022, Nikkei reported that Japanese motor maker Nidec is planning to invest Y100bn ($715m) to build a plant in Mexico to manufacture electric axles.