Toyota Motor Corporation ( TM ) shares are trading lower on Friday after the company reportedly planned to cut its electric vehicle production target for 2026 to a million cars, 30% below its earlier forecast amid a slowdown in global demand.

Meanwhile, Japan is significantly expanding its support for electric vehicle (EV) battery production, pledging up to $2.4 billion to bolster the industry.

The government will provide support for 12 projects related to storage batteries, including their parts, materials, and production equipment, with funding of up to 350 billion yen, reported Reuters.

Toyota ( TM ), among other major companies, will benefit from this substantial government backing.

The investment is part of Japan’s broader strategy to increase its annual storage battery production capacity by 50%, from 80 gigawatt-hours (GWh) to 120 GWh.

Also Read: Toyota Scales Back 2026 EV Production Plans By 30%, Trims Target To 1M Cars As Global Demand Weakens: Report

Toyota ( TM ) plans to invest around 245 billion yen in its battery subsidiaries, Prime Planet Energy & Solutions and Primearth EV Energy, to ramp up production of solid-state and prismatic batteries by 9 GWh. These batteries are expected to be supplied starting November 2026, with new plants planned for Hyogo and Fukuoka prefectures.

According to Benzinga Pro, TM stock has lost over 29% in the six months. Investors can gain exposure to the stock via Trust for Professional Managers ActivePassive International Equity ETF and Avantis International Large Cap Value ETF ( AVIV ) .

The Japanese government’s new support follows nearly $1 billion in subsidies announced in June last year and an earlier round of funding in April 2023.

Besides Toyota ( TM ), the subsidies will also support investments by Nissan Motor Co., Ltd. ( NSANF ) and collaborative projects involving Panasonic Holdings with automakers Subaru and Mazda.

Minister of Economy, Trade and Industry Ken Saito emphasized that the funding aims to strengthen Japan’s storage battery supply chain and enhance the industry’s global competitiveness.

Price Action: TM shares are trading lower by 2.87% to $177.55 at last check Friday.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.