Toyota Motor plans to construct a battery facility for electric cars in Kyushu, the southernmost of Japan's four main islands, as reported by Nikkei. The company's goal is to establish Kyushu as a key component of its EV supply chain and as an export hub to Asia, given the island's numerous auto and chip plants.

The automotive behemoth will purchase land at an industrial park being developed by the Fukuoka prefectural government in northern Kyushu, with its battery manufacturing subsidiary, Primearth EV Energy, set to manage the new factory.

The Ministry of Economy, Trade and Industry of Japan is anticipated to provide financial assistance to the facility in accordance with the provisions of the Economic Security Promotion Act.

Kyushu, often referred to as Japan’s “Silicon Island,” is a significant hub for suppliers of semiconductors and image sensors crucial for electric vehicles (EVs) and automated driving technologies. Notably, Taiwan Semiconductor Manufacturing Company (TSMC), a prominent chipmaker, has established a plant in the neighboring Kumamoto prefecture within Kyushu. Furthermore, Toyota, a renowned automotive manufacturer, holds an investment in TSMC’s local subsidiary.

The Industrial park is situated approximately 40 kilometers from Toyota’s Miyata manufacturing facility, which specializes in the assembly of Lexus vehicles. The Miyata plant has an annual production capacity of 430,000 vehicles, with 90% of its output destined for export, primarily to other Asian markets.

It Is anticipated that the new plant will serve as the primary supplier of batteries to the Miyata facility. Specific details regarding the construction timeline and investment allocation have yet to be finalized.

While Chinese manufacturers are gaining attention in Asia with their affordable electric vehicles (EVs), Japanese automakers such as Honda and Nissan are reducing their vehicle production in the region. In response, Toyota plans to establish a substantial EV supply chain in Kyushu to regain its competitive position.

Toyota aims to sell 3.5 million EVs annually worldwide by 2030 and views the Lexus brand as a cornerstone of its EV strategy. Notably, Kyushu serves as one of Lexus’ primary production hubs.

As the size and weight of EV batteries pose logistical challenges, manufacturing them in close proximity to the assembly plant can lead to significant cost reductions and improved efficiency in battery transportation.

Toyota has unveiled plans to invest a substantial amount of 5 trillion yen (approximately $32 billion) in EV-related initiatives by 2030, with a primary focus on battery development and production. In Japan, the company intends to allocate 300 billion yen towards the Himeji plant, a joint venture with Panasonic Holdings. Toyota currently operates battery plants in the prefectures of Aichi, Hyogo, and Shizuoka.

The integration of the supply chain of essential electric vehicle components, including batteries and semiconductors, within the Kyushu region will not only enhance production efficiency but also foster technological advancements.

The Kumamoto region is home to Sony Group’s image sensor manufacturing facility, which plays a crucial role in the development of automated driving technology. Additionally, Mitsubishi Electric and Rohm operate production sites in the area, specializing in power semiconductor devices that enhance the energy efficiency of electric vehicles.