Toyota adds $2.1B to its US battery factory expansion plans

Toyota will spend an extra $2.1 billion to construct a brand new battery plant in North Carolina, the newest signal that the automaker is trying to meet up with an trade that has embraced the transfer to electrical automobiles.

The Japanese automaker additionally introduced Wednesday it should construct its first U.S.-made electrical SUV at its Kentucky factory, ranging from 2025. The three-row automotive will use batteries equipped by Toyota’s North Carolina factory.

At the outset, the information means that Toyota is strengthening its dedication to EVs. Historically, the corporate has lagged behind different automakers in saying new EV fashions, as a substitute supporting hydrogen-based automobiles. But earlier this 12 months, Toyota stated it plans to introduce 10 new battery-powered automobiles, with a goal of 1.5 million EVs bought per 12 months by 2026.

The battery plant in North Carolina is a part of the corporate’s renewed pledge towards electrification — albeit it’s not one dedicated to solely all-electric automobiles. Of the six manufacturing traces slated to go reside when manufacturing begins in 2025, solely two will probably be devoted to all-electric EVs. The different 4 will probably be for hybrid EVs.

Toyota hasn’t but shared the anticipated gigawatt-hour capability of its plant. In the previous, the corporate has stated it may produce sufficient batteries for 1.2 million automobiles per 12 months.

The elevated capital spend right into a U.S. battery factory indicators that the federal government’s incentives to increase battery manufacturing nationally is working. The Inflation Reduction Act, signed into regulation in August 2022, contains incentives to produce batteries within the U.S. The outcome has been a slew of commitments from automakers home and worldwide — from Ford and General Motors to BMW and Hyundai — to get manufacturing up and operating on U.S. soil within the subsequent few years.

Toyota initially introduced its dedication to constructing a U.S.-based factory in 2021. At the time, the Japanese automaker earmarked $1.3 billion for a factory close to Greensboro. Last September, Toyota tripled that funding to $3.8 billion. The newest capital injection brings Toyota’s whole dedication to $5.9 billion.