In response to China’s booming EV industry and growing influence in the global market, reports emerged on the 24th indicating that Japan is preparing to collaborate with both Europe and the United States to establish subsidy standards in areas such as electric vehicles and semiconductors. This collaboration comes after the European Union initiated an anti-subsidy investigation into Chinese EVs in September. Discussions on these standards could take place as early as this year.

Accroding to Taiwan’s Commercial Times, this trilateral initiative aims to secure a stable supply of critical materials and promote green transformation investments. Japan is planning to invest ¥20 trillion (approximately $134 billion) in green transformation over the next decade.

Across various industries, such as steel, solar energy, and panels, China has consistently supported its development through a “whole-nation system,” relying on subsidies that have made foreign competitors apprehensive. Many foreign companies have suffered setbacks and, in some cases, even exited these markets as a result.

The electric vehicle industry, in particular, has received substantial official subsidies in China. Through technology transfers and overseas acquisitions, China has succeeded in building the complete supply chain from upstream to downstream, making it a winner in the global automotive industry transformation.

According to data from the Ministry of Industry and Information Technology, since designating electric vehicles as a crucial strategic industry in the green energy transition, China’s central government has provided subsidies totaling at least over 200 billion Chinese Yuan from 2010 to 2022. The subsidies for electric vehicles have significantly increased since the announcement of “Made in China 2025” in 2015.

Nikkei Asia reported on the 24th that Japan is pursuing this joint effort with the US and the EU to break free from its reliance on critical Chinese components and counter China’s formidable influence. The collaboration will involve discussions on subsidy standards and government procurement requirements for industries like EVs and semiconductors. It will be facilitated through diplomatic and economic dialogues between high-ranking officials from Japan and the United States and the “Economic 2+2” meetings and high-level economic dialogues between Japan and the European Union.

Japan’s Minister of Economy, Trade, and Industry, Yasutoshi Nishimura, stated that this new working group will explore industry subsidies, government procurement eligibility criteria, and cooperation with like-minded countries to establish supply chain and procurement frameworks.

In addition to the EU’s anti-subsidy investigation into Chinese EVs, the United States has also mandated that 50% of electric vehicle battery components must be produced in North America to qualify for tax incentives, a move aimed at bolstering domestic manufacturing and supply chain resilience.

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