Tokyo in March signed the U.S.-Japan Critical Minerals Agreement, securing both countries' commitment to strengthen supply chains and promote EV battery technologies. Notably, the deal allows minerals from Japan to meet sourcing requirements for U.S. electric vehicle tax credits, unlocking up to $7,500 per vehicle. The critical minerals agreement was "negotiated in warp-speed time" when similar deals "usually take years," David Boling, Eurasia Group director for Japan and Asian trade, told CNBC. Hybrid EVs still account for 96.8% of new EV sales in the country, according to the Japan Automobile Dealers Association. EV supply chain strainJapan depends on China for critical minerals essential to the production of EV components.

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Persons: Yasuhide Mizuno, Kiyoshi Ota, David Boling, Boling, Eurasia's, BEV, China's, Kristin Vekasi Organizations: Sony Honda Mobility, Sony, Bloomberg, Getty, Japan, U.S, U.S ., EV, Eurasia Group, CNBC, U.S . Trade, Honda, Toyota, Nissan, Japan Automobile Dealers Association, International Energy Agency, Argonne National Laboratory, IEA, University of Maine, Hitachi Metals, Nikkei Locations: Tokyo, Japan, U.S, China, Nikkei Asia