Key highlights
- 1The Japan battery materials market is expected to reach USD 34 billion by 2036, at a CAGR of 10.8% from 2026 to 2036.
- 2Cathode active materials account for the largest material share by value, followed by separators, anode materials, and electrolytes.
- 3Japanese companies hold strong positions in high-value materials, including separators (Asahi Kasei, Toray) and cathode materials (Sumitomo Metal Mining).
- 4Japan's strategy targets 150 GWh per year of domestic battery manufacturing capacity by 2030 and aims to triple Japanese companies' global battery-related sales between 2025 and 2035.
- 5In January 2026, Idemitsu Kosan, with Toyota, broke ground on a pilot plant for solid electrolyte for all-solid-state batteries.
- 6In June 2026, METI revised its Battery Industry Strategy into the Battery and Power Industry Strategy.
- 7In 2026, METI approved about USD 660 million in subsidies for all-solid-state battery supply-chain projects.
- 8Japanese makers are repositioning toward high-value and next-generation materials amid competition from Chinese and Korean suppliers.
- 9Key companies include Sumitomo Metal Mining Co., Ltd., Asahi Kasei Corporation, Toray Industries, Inc., UBE Corporation, and Resonac Holdings Corporation.
Report Overview
The Japan battery materials market covers the materials used to make lithium-ion and next-generation batteries, including cathode active materials, anode materials, separators, electrolytes, binders, additives, and precursors, produced by Japanese companies in Japan and abroad. Japan has long been a supplier of high-value battery materials, with leading positions in separators, cathode materials, and electrolytes, and is a centre for next-generation battery materials, particularly for all-solid-state batteries. While Japanese cell manufacturing has declined relative to China and Korea, and Japanese makers face competition in commodity materials, they retain strong positions in high-value and next-generation materials, supported by a national battery strategy, subsidies, and targets to expand domestic manufacturing and global sales. This report examines the market's size, drivers, segmentation, national dynamics, pricing, competition, recent developments, and outlook, and provides recommendations for participants.
Market dynamics
Drivers
- 01Growing demand for electric and electrified vehicles and for energy storage increases demand for battery materials, and Japanese materials are used in batteries made in Japan and abroad.
- 02Government support is substantial: Japan's battery strategy targets 150 GWh per year of domestic manufacturing capacity by 2030 and aims to triple Japanese companies' global battery-related sales between 2025 and 2035, backed by subsidies for battery and materials projects and by the Green Innovation Fund.
- 03Japan's established strength in high-value materials including high-safety separators and cathode materials, and in next-generation materials for all-solid-state batteries, supports demand.
Opportunities
- 01All-solid-state batteries which Japan aims to commercialize around 2030, require new materials such as solid electrolytes and durable cathodes, and Japanese companies, including Idemitsu Kosan and Sumitomo Metal Mining, are developing them, supported by subsidies.
- 02High-value and high-safety materials in which Japanese makers hold strong positions, offer an opportunity to compete on quality rather than cost.
- 03Supply-chain security supported by policy designating batteries and materials as critical, offers an opportunity to build domestic and allied supply chains.
Trends
- 01Facing competition from lower-cost Chinese and Korean suppliers in commodity materials, Japanese makers are repositioning toward high-value, high-safety, and next-generation materials, and some are downsizing or exiting commodity separator businesses while others invest in value-added and overseas capacity.
- 02The development of materials for all-solid-state batteries including solid electrolytes and lithium sulfide, is a major focus, supported by subsidies.
- 03Supply-chain security and localization are also shaping investment.
Report Summary
| Base Year | 2025 |
|---|---|
| Forecast Period | 2026-2036 |
| Market Size (2025) | USD 11 billion |
| Market Size (2026) | USD 12.2 billion |
| Market Size (2036) | USD 34 billion |
| CAGR (Value) | 10.8% (2026-2036) |
| Segments Covered | By Material Type (Cathode Active Materials, Anode Materials, Separators, Electrolytes, Binders & Additives, Others); By Battery Type (Lithium-ion [NMC/NCA, LFP], All-Solid-State, Others); By Application (EV/xEV, Energy Storage Systems, Consumer Electronics, Industrial) |
| Regions Covered | Japan (domestic production and Japanese companies' materials output) |
| Key Companies | Sumitomo Metal Mining Co., Ltd., Asahi Kasei Corporation, Toray Industries, Inc., UBE Corporation, Mitsubishi Chemical Group Corporation, Resonac Holdings Corporation, Kureha Corporation, Sumitomo Chemical Co., Ltd., Central Glass Co., Ltd., Idemitsu Kosan Co., Ltd. |
Segmental analysis
By Material Type
- Cathode active materials including nickel-based materials such as NCA and NMC and, increasingly, lithium iron phosphate (LFP), account for the largest share by value, and Japanese companies such as Sumitomo Metal Mining hold strong positions.
- Anode materials mainly graphite, are supplied by companies such as Resonac and Mitsubishi Chemical.
- Separators in which Asahi Kasei and Toray are leading suppliers, are a high-value material where safety is critical.
- Electrolytes including lithium salts, are supplied by companies such as UBE, Mitsubishi Chemical, Central Glass, and Stella Chemifa.
- Binders additives, and precursors complete the set.
Cathode materials and separators account for the largest value, and Japanese makers are strongest in high-value materials.
By Battery Type
- Lithium-ion materials for nickel-based (NMC/NCA) and lithium iron phosphate (LFP) batteries, account for the great majority of current demand, and Japanese makers supply high-value lithium-ion materials.
- All-solid-state materials including solid electrolytes such as sulfide electrolytes and lithium sulfide, and durable cathodes, are an emerging and strategically important segment that Japan aims to commercialize around 2030, with companies such as Idemitsu Kosan and Sumitomo Metal Mining developing them.
- Materials for other batteries complete the range.
Lithium-ion materials dominate current demand, while all-solid-state materials are the strategic growth area, and the mix reflects Japan's focus on next-generation batteries.
By Application
- EV and electrified-vehicle batteries account for the largest and fastest-growing share of demand for battery materials, driven by vehicle electrification.
- Energy storage systems for grid and behind-the-meter storage, are a growing application.
- Consumer electronics a long-standing application for Japanese materials, and industrial uses account for further demand.
EV and electrified-vehicle applications account for most demand and growth, while energy storage grows and consumer electronics and industrial uses provide established demand, and the application mix reflects the shift toward vehicle electrification and storage.
Market Dynamics in Japan
- 1
National Battery Strategy
Japan's national battery strategy shapes the market. Japan's strategy targets 150 GWh per year of domestic battery manufacturing capacity by 2030 and into the mid-2030s, aims to triple Japanese companies' global battery-related sales between 2025 and 2035, and prioritizes the commercialization of all-solid-state batteries around 2030. In June 2026, METI revised its Battery Industry Strategy into the Battery and Power Industry Strategy, updating the policy direction. The strategy and its targets set the direction for battery and materials investment in Japan.
- 2
Government Subsidies and Support
Government subsidies support battery and materials projects. Japan has approved subsidies for EV battery projects toward the 150 GWh target, and in 2026 approved about USD 660 million (JPY 105.7 billion) for all-solid-state battery supply-chain projects, with a share directed to sulfide solid electrolyte and lithium sulfide production. The Green Innovation Fund, of about JPY 2.7 trillion, funds next-generation battery research and commercialization. These subsidies and funds support the development of battery materials, particularly for next-generation batteries.
- 3
All-Solid-State Battery Materials
All-solid-state battery materials are a strategic focus in Japan. Japanese companies are developing the materials required for all-solid-state batteries, including solid electrolytes and durable cathodes: Idemitsu Kosan, with Toyota, is building solid electrolyte and lithium sulfide capacity, and Sumitomo Metal Mining, with Toyota, is developing durable cathode materials. This development is central to Japan's aim to commercialize all-solid-state batteries around 2030, and it is a defining feature of the Japanese materials market.
- 4
Competition and Repositioning
Competition and repositioning shape the market across Japan. Japanese makers face competition from lower-cost Chinese and Korean suppliers in commodity materials, and are repositioning toward high-value, high-safety, and next-generation materials, with some downsizing commodity businesses and others investing in value-added and overseas capacity. This repositioning, driven by competition and supported by strategy and subsidies, shapes the Japanese materials industry and its direction.
Pricing Analysis
Battery material prices in Japan are shaped by raw-material costs, processing and quality, competition, and next-generation development. Raw-material costs, including lithium, nickel, cobalt, and graphite, are a major factor, and their prices are volatile. Processing and quality add cost, and Japanese high-value, high-safety materials command a premium over lower-cost commodity materials. Competition from lower-cost Chinese and Korean suppliers puts downward pressure on prices for commodity materials, which is one reason Japanese makers are repositioning toward high-value materials. Currency affects the cost of imported raw materials. Next-generation materials, such as solid electrolytes, are currently high-cost and are a focus of cost-reduction efforts supported by subsidies.
Overall, prices reflect raw-material costs and a premium for high-value materials, with competition pressing commodity prices and next-generation materials at an early, high-cost stage.
Competitive landscape
The Japan battery materials market includes chemical and materials companies, metals companies, and specialized materials makers, across cathode, anode, separator, electrolyte, and next-generation materials. Competition centers on quality and safety, technology, cost, and, increasingly, next-generation materials, with Japanese makers competing on high-value materials rather than commodity cost. Participants compete on materials performance, reliability, relationships with cell and vehicle makers, and capability in next-generation materials, and cooperation between materials makers and vehicle makers, particularly on all-solid-state materials, is a feature of the market. As competition in commodity materials intensifies, high-value and next-generation materials have become the focus.
Companies active in the market include cathode makers such as Sumitomo Metal Mining Co., Ltd., Nichia Corporation, and Sumitomo Chemical Co., Ltd., separator makers Asahi Kasei Corporation and Toray Industries, Inc., electrolyte and separator maker UBE Corporation, anode and electrolyte maker Mitsubishi Chemical Group Corporation, anode maker Resonac Holdings Corporation, binder and hard-carbon maker Kureha Corporation, electrolyte and lithium-salt makers Central Glass Co., Ltd. and Stella Chemifa Corporation, and solid-electrolyte developer Idemitsu Kosan Co., Ltd. These companies compete and cooperate across the materials value chain, increasingly on next-generation materials.
Voice of Customer
Primary interviews conducted for this study noted that Japanese makers are competing on high-value materials, that all-solid-state materials are a strategic focus, and that competition and subsidies shape the market. Three representative perspectives are summarized below.
"We cannot compete with the lowest-cost suppliers on commodity materials, so we focus on high-value, high-safety materials where our technology is an advantage. That is where we invest." — Executive, materials company
"All-solid-state batteries need new materials, and the collaboration between materials makers and vehicle makers is essential to develop and scale them. That is the strategic priority." — Manager, battery materials developer
"Subsidies and the national strategy are important, particularly for next-generation materials, because the early stage is high-cost and needs support to reach scale." — Director, chemical company
Analyst perspective
In our assessment, the Japan battery materials market is defined by two forces: strong existing positions in high-value materials under pressure from lower-cost competition, and a strategic push into next-generation, particularly all-solid-state, materials. Japan has long supplied high-value battery materials, including separators and cathode materials, and Japanese makers such as Asahi Kasei, Toray, Sumitomo Metal Mining, and UBE remain important. However, competition from Chinese and Korean suppliers in commodity materials has pressed prices and led some Japanese makers to reposition, downsizing commodity businesses and focusing on high-value and next-generation materials. The clearest strategic direction is all-solid-state batteries, which Japan aims to commercialize around 2030 and which require new materials that Japanese companies, working with vehicle makers such as Toyota, are developing, supported by subsidies including about USD 660 million approved for solid-state supply chains in 2026. We expect steady growth, concentrated in high-value and next-generation materials rather than commodity materials, with the outcome depending on the success of all-solid-state commercialization and on Japanese makers' ability to compete on value.
Key Strategic Developments
- January 2026 — Idemitsu Kosan solid electrolyte plant groundbreaking: Idemitsu Kosan Co., Ltd., in collaboration with Toyota, broke ground on a pilot plant to produce solid electrolyte and lithium sulfide for all-solid-state batteries, to be completed by the end of 2027, supporting Toyota's plan to launch all-solid-state battery vehicles in 2027-2028. Impact: advances domestic supply of next-generation battery materials.
- 2026 — Sumitomo Metal Mining and Toyota collaborate on solid-state cathode materials: Sumitomo Metal Mining Co., Ltd. and Toyota moved toward mass production of a durable cathode material for all-solid-state batteries, developed using Sumitomo Metal Mining's powder-synthesis technology. Impact: advances domestic cathode materials for next-generation batteries.
- 2026 — METI approves about USD 660 million for all-solid-state battery supply chains: METI approved about USD 660 million (JPY 105.7 billion) in subsidies for five all-solid-state battery supply-chain projects, with a share directed to sulfide solid electrolyte and lithium sulfide production. Impact: supports the development and scale-up of next-generation battery materials.
- June 2026 — METI revises the Battery Industry Strategy: METI revised its Battery Industry Strategy into the Battery and Power Industry Strategy, updating the policy direction for batteries and materials. Impact: sets the updated framework for battery and materials investment.
- 2026 — Japanese makers reposition in separators: Japanese separator makers continued to reposition, with Toray focusing on high-safety, value-added applications and reviewing commodity separator operations, and Asahi Kasei investing in overseas value-added capacity. Impact: reflects the shift away from commodity materials toward high-value materials.
Strategic Recommendations
- Focus on high-value and high-safety materials. As competition presses commodity prices, Japanese makers should concentrate on high-value, high-safety materials where their technology is an advantage, rather than competing on commodity cost.
- Invest in all-solid-state materials. Prioritize the development and scale-up of materials for all-solid-state batteries, including solid electrolytes, lithium sulfide, and durable cathodes, using subsidies and collaboration with vehicle makers.
- Use national strategy and subsidies. Align investment with the Battery and Power Industry Strategy and access subsidies for battery and next-generation materials projects, which are important given the early, high-cost stage of next-generation materials.
- Build secure and allied supply chains. Develop secure supply chains for critical raw materials and consider domestic and allied production, supported by economic-security policy, to reduce reliance on single sources.
- Collaborate with cell and vehicle makers. Work closely with cell and vehicle makers, particularly on next-generation materials, to develop, qualify, and scale materials in line with battery development.
- Manage raw-material cost and currency risk. Manage exposure to volatile raw-material prices and currency, including through sourcing strategies and, where possible, recycling, to support competitiveness.
Sustainability impact
Supporting Electrification and Emissions Reduction
Battery materials enable the electric and electrified vehicles and energy storage that reduce emissions in transport and the power system. By supplying the materials for batteries, the sector supports electrification.
By supplying the materials for batteries, the Japan battery materials market supports the electrification of transport and the growth of energy storage, contributing to emissions reduction, while the production of materials itself must be managed for its own impact.
Developing Next-Generation Batteries
All-solid-state batteries, which Japan is developing, offer the potential for higher energy density and improved safety, supporting more capable and safer batteries. Next-generation materials support the improvement of batteries.
By developing next-generation battery materials, Japan supports the improvement of battery performance and safety, contributing to more effective electrification and energy storage.
Securing and Recycling Critical Materials
Battery materials depend on critical raw materials such as lithium, nickel, cobalt, and graphite, and securing and recycling these materials supports a more sustainable and resilient supply. Recycling and secure sourcing reduce reliance on primary extraction.
By securing and recycling critical materials, the sector can reduce its reliance on primary extraction and support a more sustainable and resilient materials supply, an important part of responsible battery-material production.
Supporting Industrial Capability
Japan's battery materials industry supports advanced manufacturing capability and skilled employment, including in next-generation materials. The industry provides high-value manufacturing.
By supporting advanced manufacturing capability and skilled employment, the battery materials industry contributes to the economic sustainability of Japan's manufacturing sector and to the wider transition to electrification.
Table of contents
14 chapters · 132 pages · click to expandFrequently asked questions
The Japan battery materials market was valued at USD 11 billion in 2025 and is projected to reach USD 34 billion by 2036, at a CAGR of 10.8% from 2026 to 2036, driven by vehicle electrification and energy storage, government strategy and subsidies, and Japan's strength in high-value and next-generation materials.