Japan is intensifying its search for stable electric vehicle (EV) battery materials. Recently,
Japan’s Minister Yasutoshi Nishimura visited Canada and signed a cooperation agreement.
Canada is not alone; Japan is also turning to Australia to diversify its supply chain and reduce its dependence on China for crucial materials like lithium and nickel.
Both Canada and Australia are making moves to limit China’s influence.
For instance, Canada revised its investment guidelines to restrict Chinese state-owned firms in mining.
This change provides a new opening for Japanese companies, supported by government subsidies.
South Korea has already established a strong foothold in Canada and Australia, putting pressure on Japan to make fast decisions.
Japanese companies have historically been more cautious than their South Korean counterparts, avoiding direct investments in mining projects.
In the U.S., tax credits are available for EV buyers, but only if a certain percentage of the battery materials are sourced from U.S. trade partners.
This policy could give an extra push to the Japan-Canada-Australia collaboration.
Several nations rich in essential minerals like Indonesia and Chile are also restricting exports.
This adds another layer of complexity for Japan, making the alliances with Canada and Australia even more valuable.
Both Japan and Canada regard China as a “central challenge,” and their new partnership signals a concerted effort to reduce global dependency on China.
Meanwhile, Australia’s abundant mineral reserves make it an ideal third partner.
The preliminary agreements between these nations set the stage for more concrete steps.
Japan, Canada, and Australia could offer a blueprint for diversifying the global EV battery supply chain.
Background
The partnership between Japan, Canada, and Australia gains more significance when seen in the context of rising geopolitical tensions.
Japan has long-standing political issues with China, making diversification an economic and strategic move.
Similarly, Canada’s relations with China have been strained, driving its interest in collaborating with democratic nations.
South Korea’s proactive investment in both Canadian and Australian markets gives it a head start.
This puts Japan under pressure to catch up, considering South Korea is the largest battery market outside China.
Even U.S. companies like Ford are making decisive investments in Canada, emphasizing the sense of urgency for Japan.
Australia plays a vital role in the trilateral partnership, as it is rich in essential minerals. Moreover, it also shares political concerns about China’s dominance.
The geopolitical scenario thus encourages a stronger alliance between democratic countries.
China’s command over EV battery materials has made Western countries uneasy globally.
They want to counter China’s growing influence by developing alternative supply chains.
By collaborating, Japan, Canada, and Australia can diversify their chains and encourage other democracies to do the same.
These partnerships could offer a strategic and economic win-win for all parties involved, including forming a robust, diversified supply chain.
The collective might of Japan, Canada, and Australia can effectively challenge China’s dominance in the market and bring stability in an increasingly tense geopolitical landscape.