Toyota Motor Corporation (TM) shares are trading lower on Friday after reports emerged that the company plans to cut its electric vehicle (EV) production target for 2026 to one million cars, a 30% reduction from its previous forecast. This adjustment comes amid a slowdown in global demand for EVs.
Simultaneously, Japan is stepping up its support for the EV battery production industry with a significant investment of up to $2.4 billion. This funding will back 12 projects related to storage batteries, encompassing their parts, materials, and production equipment. The Japanese government aims to increase its annual storage battery production capacity by 50%, from 80 gigawatt-hours (GWh) to 120 GWh.
Toyota is set to benefit from this substantial government backing, alongside other major companies. The automaker plans to invest approximately 245 billion yen in its battery subsidiaries, Prime Planet Energy & Solutions and Primearth EV Energy, to ramp up the production of solid-state and prismatic batteries by 9 GWh. These batteries are expected to be supplied starting in November 2026, with new plants planned for Hyogo and Fukuoka prefectures.
Toyota’s stock (TM) has experienced a decline of over 29% in the past six months, according to Benzinga Pro. Investors seeking exposure to the stock can consider the Trust for Professional Managers ActivePassive International Equity ETF (APIE) and the Avantis International Large Cap Value ETF (AVIV).
Japan’s latest support for the EV battery industry follows nearly $1 billion in subsidies announced last June and an earlier round of funding in April 2023. Aside from Toyota, the subsidies will also support investments by Nissan Motor Co., Ltd. (NSANY) and collaborative projects involving Panasonic Holdings with automakers Subaru and Mazda.
Minister of Economy, Trade and Industry Ken Saito highlighted that the funding’s objective is to bolster Japan’s storage battery supply chain and enhance the industry’s global competitiveness.
TM shares closed down 2.87% at $177.55 on Friday.
