Japan has enlisted electronics firm Toshiba to help it try to win Asia's biggest defense contract, a A$50 billion ($36 billion) deal to build a dozen submarines for Australia, three sources said.
Toshiba is considering building a factory in Australia to make lithium-ion batteries to power the vessels, said the sources who are familiar with the plan but not authorized to talk to the media.
The potential investment, which is contingent on Canberra picking the Japanese design, is part of an incentive package promising commercial and defense sector work beyond the submarine program, aimed at winning over politicians who want jobs in Australia.
The proposed plant, which could be worth hundreds of millions of dollars, will also fabricate industrial scale power packs for commercial customers around the world, said the sources.
Such an investment could be an attractive proposition for Australia, which is seeking other avenues of growth as it grapples with plunging commodity prices.
"Australia's prime minister (Malcolm Turnbull) is promoting innovation, and that is something Japan can do," said one of the sources.