Interstellar Technologies Inc. announced Tuesday that Toyota is contributing ¥7 billion ($44 million) through its subsidiary and research unit, Woven by Toyota, and the carmaker will gain a seat on the startup’s executive board as a result.

It’s the latest sign of progress in the Japanese government’s push to nurture the country’s private space sector. But it’s still a challenge for fledgling companies to keep up in a fast-paced, competitive field increasingly dominated by giants like Elon Musk’s SpaceX.

As the US launches more than 100 rockets every year, and China several dozen, Japan’s successful space voyages are still in the single digits.

Japan made three launches in 2023, Interstellar said in its statement. That leaves much room for improvement before it reaches its goal to launch 30 times annually by the first half of the 2030s.

Japan will need a “structural transformation of the domestic space industry” to make good on that promise, said Interstellar. The firm aims to “leverage automotive industry expertise, including Toyota’s production methods, to transition rocket manufacturing into a high-quality, cost-effective, and scalable process,” it said. 

Toyota Chairman Akio Toyoda hinted at the investment in a speech at CES in Las Vegas on Monday, saying that his company’s interest in rockets is part of a broader effort to innovate in transportation. He also indicated that Toyota hopes to vie with Space Exploration Technologies Corp., more commonly known as SpaceX, Musk’s sister company to Tesla Inc.

“The future of mobility shouldn’t be limited to just cars. Or just one car company, for that matter,” Toyoda said.

Toyota started working with the Japan Aerospace Exploration Agency, or JAXA, in 2019 on a lunar rover to be used as part of NASA’s Artemis program to return astronauts to the moon. 

Astronauts will be able to ride without spacesuits in the Toyota rover and explore the lunar surface for longer periods of time, the US State Department said in April after the two governments signed an agreement for the vehicle.

For Toyota, the deal with Interstellar is one small step for many companies looking to take advantage of booming demand for spacecrafts able to carry satellites to orbit.

The Japanese government in November began announcing recipients of its strategic fund, which will dole out ¥1 trillion over the next decade to a variety of startups, manufacturers and research institutions.

While Japanese companies have been lauded for their satellites and precision instruments used to gather data in low-Earth orbit, the nation’s geography is far from ideal for building an expansive network of launch facilities.

What would have been Japan’s first commercial rocket, launched from its first private launchpad, in December failed a second time to make its inaugural voyage. 

Space One Co.’s explosive blunders dealt a painful blow to Japan’s ambitions, and served as a reminder that trying to reach orbit isn’t for the faint of heart.

“This is another way to expand mobility in land, sea and air,” Hajime Kumabe, Woven’s chief executive officer, told reporters at CES in Las Vegas. “Our craftsmanship expertise will be an asset to Interstellar’s rocket manufacturing.”

At the same Las Vegas trade show, Nvidia Corp. CEO Jensen Huang on Monday announced that Toyota, the world’s biggest vehicle maker, is now a customer for his company’s autonomous driving AI products and will use its Drive chips and software.

(Updates with news about Nvidia partnership in last paragraph.)