Toyota Motor Corporation (TSE: 7203) is to construct a US$1.3B battery plant in North Carolina, the company announced on Monday 6 December. This move is intended to boost Toyota’s efforts in producing hybrid and electric vehicles (EVs).
According to a report by Reuters, the plant will begin production in 2025, and will initially be capable of supplying lithium-ion batteries for 800,000 vehicles each year. Chris Reynolds, Toyota Motor North America’s chief administrative officer, says the new plant will “pave the way” for the automaker’s production of EVs in the U.S. The North Carolina plant is expected to create up to 1,750 new jobs in the country.
The Reuters report notes that in October, Toyota announced it would set up a new company, Toyota Battery Manufacturing, and build a U.S. automotive battery plant with Toyota Tsusho (TSE: 8015), the automaker’s metals trading arm and a unit of the Toyota Group. Toyota will hold a 90% stake in the new company.
The North Carolina plant will initially focus on producing batteries for Toyota’s hybrid vehicles, with an eventual long-term focus on supplying batteries for EVs. The state has agreed to repay Toyota for up to US$79.1M over a 20-year span, and the company stands to receive up to an estimated US$315M if the project is extended to US$3B.
The move comes after U.S. President Joe Biden signed an executive order in August this year aiming to make half of all new vehicles sold in 2030 zero-emissions vehicles. This 50% goal involves battery electric, fuel cell and plug-in hybrid vehicles that also have gasoline engines.
Reuters states that the investment is part of Toyota’s October announcement that it would invest US$3.4B in U.S. automotive battery development and production through to 2030.