How are Japan and the EU reshaping the global battery supply chain? A new strategic alliance aims to reduce China reliance while boosting domestic production.
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| Japan and the EU sign a landmark battery supply chain agreement to counter China’s dominance. A closer look at the pact’s strategic implications. Image: CH |
TOKYO, Japan — September 14, 2025:
In a world rapidly shifting toward electrification, Japan and the European Union are realigning their economic strategies to confront a pressing challenge: overdependence on China for rechargeable battery technology and materials. A new memorandum of understanding, set to be signed in Tokyo, marks the beginning of a wide-ranging partnership between the two powers to strengthen and diversify the battery supply chain.
The initiative coincides with the visit of European Commission Executive Vice President Stéphane Séjourné, highlighting the urgency of economic security in the context of energy technology. At stake is not only industrial competitiveness but strategic autonomy in a sector that underpins electric vehicles, renewable energy storage, and critical infrastructure.
In 2015, Japan held roughly half of the global market share for automotive lithium-ion batteries. A decade later, Chinese manufacturers command about 60 percent, while Japan’s share has fallen to just 8 percent. That shift is not simply the result of innovation or competition—it has been accelerated by China’s tightening grip on upstream resources. In 2023, Beijing began restricting exports of graphite, a vital raw material in battery production. The move alarmed policymakers in Europe, where EV adoption has surged and dependence on Chinese battery imports now poses a growing strategic risk.
The Japan-EU battery agreement is designed as a counterweight to that trend. Its focus lies not just in expanding production capacity but in building resilience across the supply chain. Key aspects include cooperative efforts on battery recycling and raw material reuse, greater transparency through supply chain data sharing, and enhanced coordination between Japanese and European manufacturers. The aim is to create a more secure, sustainable, and innovation-driven battery ecosystem—one that supports long-term goals such as decarbonization without exposing industries to geopolitical vulnerability.
This agreement is also the first formal step under the Japan-EU Competitiveness Partnership, launched by both sides in July. It reflects a broader recognition that energy technology supply chains are no longer merely commercial issues. They have become critical infrastructure—essential to both economic growth and national sovereignty.
The agreement goes beyond technical collaboration. It suggests a rethinking of how global trade frameworks will handle strategic technologies. Japan and the EU are reviewing industrial subsidy policies and public procurement standards to prevent a race to the bottom in price competition. Instead, they are seeking to promote high-performance, safe battery technologies that meet not only market demand but also regulatory and security benchmarks. In this environment, quality, safety, and traceability could become as decisive as cost.
Prime Minister Shigeru Ishiba is expected to meet with Séjourné on Tuesday to formalize political backing for the deal and reaffirm their shared commitment to building secure, future-ready supply chains. For both Japan and the EU, this is not just a tactical adjustment to market conditions. It is a strategic repositioning in an increasingly fragmented global economy.
As batteries become the backbone of transportation, energy, and digital infrastructure, control over their supply chain will shape not just who leads in technology—but who holds leverage in a rapidly electrifying world.