Japan and the European Union are forming a comprehensive partnership to strengthen the supply chain for rechargeable batteries, aiming to reduce reliance on China amid economic security concerns.

Europe, experiencing a rapid increase in electric vehicle adoption, plans to boost local battery production through collaboration with Japanese manufacturers, while reviewing subsidies and procurement practices to prevent excessive price competition.

China's export restrictions on graphite, a critical material for lithium-ion batteries, have heightened European fears of over-dependence on Chinese battery supply chains.

Prime Minister Shigeru Ishiba is expected to reaffirm Japan-EU cooperation on supply chains, including batteries, during upcoming meetings with EU officials such as Stephane Sejourne and European Commission Vice President.

Japan's advanced lithium-ion battery technology, especially in automotive batteries, once held about 50% of the global market share in 2015, but Chinese manufacturers now dominate with around 60% as of 2023.

This shift in market share is driven by concerns over China's dominance, with Japanese companies holding only 8% of the market in 2023, compared to their previous leadership position.

Industry groups from Japan and Europe are set to sign a memorandum of understanding to promote cooperation in battery recycling, data sharing, and company exchanges, marking the first initiative under the Japan-EU Competitiveness Alliance.

The partnership aims to enhance supply chain resilience by promoting raw material reuse through battery recycling, improving transparency, and developing human resources in the battery industry.