Toyota adds $2.1B to its US battery factory expansion plans
Toyota will spend an additional $2.1 billion to build a new battery plant in North Carolina, the latest sign that the automaker is attempting to catch up with an industry that has embraced the move to electric vehicles.
The Japanese automaker also announced Wednesday it will build its first U.S.-made electric SUV at its Kentucky factory, starting from 2025. The three-row car will use batteries supplied by Toyota’s North Carolina factory.
At the outset, the news suggests that Toyota is strengthening its commitment to EVs. Historically, the company has lagged behind other automakers in announcing new EV models, instead supporting hydrogen-based vehicles. But earlier this year, Toyota said it plans to introduce 10 new battery-powered vehicles, with a target of 1.5 million EVs sold per year by 2026.
The battery plant in North Carolina is part of the company’s renewed pledge toward electrification — albeit it’s not one committed to only all-electric vehicles. Of the six production lines slated to go live when production begins in 2025, only two will be dedicated to all-electric EVs. The other four will be for hybrid EVs.
Toyota hasn’t yet shared the expected gigawatt-hour capacity of its plant. In the past, the company has said it could produce enough batteries for 1.2 million vehicles per year.
The increased capital spend into a U.S. battery factory signals that the government’s incentives to boost battery manufacturing nationally is working. The Inflation Reduction Act, signed into law in August 2022, includes incentives to produce batteries in the U.S. The result has been a slew of commitments from automakers domestic and international — from Ford and General Motors to BMW and Hyundai — to get production up and running on U.S. soil in the next few years.
Toyota initially announced its commitment to building a U.S.-based factory in 2021. At the time, the Japanese automaker earmarked $1.3 billion for a factory near Greensboro. Last September, Toyota tripled that investment to $3.8 billion. The latest capital injection brings Toyota’s total commitment to $5.9 billion.
