Toyota Motor Corp. plans to invest $3.4 billion in the U.S. through 2030 to establish a new company and build its first U.S. battery plant, becoming the latest global automaker to accelerate the transition to electric vehicles through a battery push.
Production would start in 2025 and at first focus on batteries for hybrid electric vehicles, creating 1,750 new jobs, the company said in a statement that didn’t disclose the location or production capacity. The investment is specifically for battery work and won’t be used to expand vehicle-assembly capacity, a spokesman said.
The investment is part of Toyota’s global plan announced last month to spend 1.5 trillion yen ($13.1 billion) by 2030 on battery development and production. The world’s No. 1 automaker expects electric vehicles to account for nearly 70% of its U.S. sales by 2030, up from almost 25% currently.
Global automakers are boosting investments in battery production to take on EV market leader Tesla Inc. Stellantis NV and LG Energy announced plans Monday to build a battery-cell factory in North America to supply the carmaker’s growing fleet of electric vehicles. Stellantis, with brands like Jeep and Ram, has a target of raising U.S. sales of electrified vehicles to 40% of deliveries by the end of the decade.
Ford Motor Co. last month unveiled a plan to spend $11.4 billion with South Korea’s SK Innovation Co. to build battery and EV plants in Tennessee and Kentucky. General Motors Co. also stepped up investments in electric and autonomous vehicles in June, with a plan to spend $35 billion by 2025.
By building a new U.S. battery plant, Toyota is pushing for a localization of its supply chain and production knowhow. Like other carmakers, its output has been hit by supply-chain disruptions as factories in the key Southeast Asia region shut down due to Covid-19.
“This investment will help usher in more affordable electrified vehicles for U.S. consumers,” Ted Ogawa, chief executive officer of Toyota Motor North America, said in a statement. The Japanese automaker’s U.S. headquarters is in Plano, Texas.
The investment may also help the automaker politically, with Ogawa saying Toyota’s electrification push is about creating American jobs while helping the environment and consumers. As the Biden administration pushes for a sweeping clean-energy agenda, Toyota is among the foreign automakers and other non-unionized carmakers who have voiced their unease with signs that the administration favors unionized Detroit carmakers in the race to win over electric car buyers.
Last month, Toyota said a proposal by U.S. House Democratic lawmakers to give union-made electric vehicles higher subsidies discriminates “against American autoworkers based on their choice not to unionize.”
By 2030, Toyota expects to sell 2 million zero-emission vehicles globally. The company projects it will sell as many as 1.8 million electrified vehicles in the U.S., including zero-emission models.
(Updates with Stellantis plans in fourth paragraph)
-By Yueqi Yang (Bloomberg)
-With assistance from Tara Patel