Subaru to spend $1.9bn on battery capacity, add EV line

Subaru Corp. plans to invest around JPY250bn ($1.9bn) on electric-vehicle battery capacity over the next five years and will add an EV production line to its main factory in Gunma prefecture in Japan that should begin producing cars from 2027, the automaker said Thursday.

The new line will involve an investment of around JPY100bn, the Nikkei reported earlier.

Japanese automakers have lagged behind global peers in rolling out electric cars and the country’s EV penetration rate is barely 1 per cent. Now a catch up game of sorts is underway with Honda Motor Co. planning to spend JPY5tn over the next decade to make cleaner cars and Toyota Motor Corp. investing $624m to make electric vehicle components in India.

Read: Toyota to invest $624m to make EV parts in India

Subaru, which makes almost 70 per cent of its sales in the US, aims to have 40 per cent of new global car sales be electric by 2030.

Subaru also reported full-year results on Thursday and forecast operating income for the current fiscal year that will end in March 2023 of JPY200bn, slightly better than analyst estimates of JPY196bn.

The automaker has started receiving orders for its Solterra model, its first all-electric SUV developed with Toyota. Subaru chief executive officer Tomomi Nakamura said last year that the company plans to “use the alliance to build up technology and know-how.”

Subaru shares jumped as much as 9.6 per cent, their biggest intraday gain in 15 months.

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