Toyota Motor Corp. plans to spend 1.5 trillion yen ($13.7 billion) on the supply and development of batteries for hybrid and electric vehicles by 2030, joining other global automakers boosting investments in anticipation of greater demand.
The world’s No. 1 automaker will commit roughly 1 trillion yen for production lines, Toyota executives announced at an online briefing Tuesday. It will also seek to set up 70 EV battery lines by 2030 and is aiming to secure 200 gWh of battery supply by then, up from its previous goal of 180 gWh.
BMW AG disclosed on Monday that it will increase orders for battery cells to more than 20 billion euros ($23.8 billion), up from 12 billion euros previously. While Toyota’s moves appear slight compared to Volkswagen AG’s $29 billion push to build six battery factories in Europe for a total of 240 gWh by the end of the decade, they reflect a more bullish stance from the Japanese automaker, which in the past had questioned whether the high cost of electric vehicles will inhibit their near-term spread.
Now, Toyota is readying 200 gWh worth of batteries “or more” based on the potential of battery EVs “spreading quicker than expected,” Chief Technology Officer Masahiko Maeda said at the briefing. “Zero-emission vehicles are important in regions where renewable energy is widely adopted,” Maeda said. That’s why “Toyota is preparing a full lineup of CO2 emission-reducing vehicles,” he said.
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Earlier this year, Toyota announced plans to introduce 15 EVs globally by 2025, to a certain extent quelling concerns that it is falling behind in the industrywide pivot to electric cars. Seven of the models are part of Toyota’s new “bZ” series, the first of which was previewed at the 2021 Shanghai Auto Show in April.
Still, at the briefing Tuesday, Toyota stuck to its usual messaging that non-EV cars such as hybrids will continue to play a lasting role in global auto markets in the coming decades. Although the emissions-reducing potential of an EV is three times that of a hybrid, “we can provide hybrids at an affordable price,” Maeda said. That’s why at the moment “using hybrids is an effective way of reducing carbon emissions.”
Going forward, Toyota will look to make a number of improvements to its batteries to lower the total cost of EVs. The company is targeting a per vehicle cost reduction of 50% for its future batteries, according to Maeda. Toyota also sees solid-state batteries boosting the performance of hybrid and battery-electric cars, and is looking to put the next-generation batteries into practical use in the first half of the decade, he said.
While the path to decarbonization of the auto industry remains unclear in many ways, “Toyota’s laid out a path forward that allows it to adapt to various changes,” wrote Bloomberg Intelligence analyst Tatsuo Yoshida wrote in a note. Based on factors such as various regions’ uptake of renewable energy, “Toyota will be able to respond flexibly,” Yoshida said.
– By River Davis (Bloomberg)
