Japan aims to introduce tax incentives for local production of EV batteries and semiconductors from April 2024. This strategy aims to enhance Japan’s economic security by decreasing dependency on foreign sources for these vital components.
The proposed tax benefits could reach 20% of the investment cost in new EV battery and semiconductor manufacturing facilities. Such incentives intend to attract more corporate investments in Japan’s industrial landscape.
To further stimulate domestic EV battery and semiconductor production, Japan’s government is evaluating supplementary actions. This includes granting subsidies and financial aid to companies willing to shift production operations to Japan.
Japan’s comprehensive objective is to attain greater self-sufficiency in key technologies. The current global chip shortage has intensified concerns about relying on external sources for these technologies.
Approximately 100 billion yen (about $830 million) annually might be the cost of these tax incentives for EV batteries and semiconductors. The government views this as a justifiable investment to secure the nation’s economic future.
This move is well-received by Japanese automotive and electronics sectors that heavily rely on these components. These industries have consistently urged the government to mitigate dependency on foreign suppliers.
On a global scale, the EV and semiconductor industries welcome these tax breaks. They view Japan as a potential location for expanding production, especially with the added fiscal benefits.
