Honda is moving to partner directly with Taiwan Semiconductor Manufacturing Co. (TSMC) on procurement, ramping up investment in battery production in Japan as part of a supply chain overhaul it hopes will supercharge its pivot to electric vehicles.

Nikkei Asia reports the automaker's new supply chain structure echoes that of tech giant Apple, which works directly with parts suppliers on development and production in order to control quality and bring down costs.

Honda said on April 28 that it would partner with battery manufacturer GS Yuasa to invest 434.1 billion yen (around $3.18 billion) to develop and mass-produce lithium-ion batteries for EVs in Japan. The investment will be bolstered by a government subsidy from Japan's Ministry of Economy, Trade and Industry of up to 158.7 billion yen.

Full-scale operations at their new plant are expected to start in October 2027, with an estimated annual production capacity of 20 gigawatt-hours, equivalent to the battery power of hundreds of thousands of EVs.