Government Forces Toyota To Invest In American Battery Production

Electric Vehicles / Comments

The world's largest automaker by sales will sink $5.6 billion into increasing battery production in the US and Japan.

Toyota may have introduced the bZ4X in recent months as its first dedicated battery electric vehicle (BEV), but that hasn't stopped environmental groups from critiquing the company's reticence to commit to EVs. And while it remains committed to offering something for the varied needs of its customers, the automaker is smart enough to know it will be left behind if it doesn't embrace electric vehicles.

As such, the company announced it will invest approximately $5.6 billion in the United States and Japan, to increase the production of batteries for EVs. Of that sizeable investment, around $2.5 billion is earmarked for the Toyota Battery Manufacturing facility in North Carolina. The latter is likely the result of the Inflation Reduction Act being passed into law, which excludes automakers without US manufacturing facilities from receiving electric vehicle tax credits, and has prompted several manufacturers to declare their interest in US-based battery manufacturing investments in the next few years. While it may not be solely responsible for their interests, it has likely spurred them into making announcements sooner than planned.

Toyota

Battery production is expected to kick off between 2024 and 2026, with most of the investment (approximately $3.1 billion) funneled into the Himeji Plant of Prime Planet Energy & Solutions in Japan.

Toyota has said this new investment would increase Japanese and US battery production capacity by up to 40 GWh. This will be done through the adoption of the company's unique production system and by building more efficient assembly lines. Of course, the company will also inject cash into training staff in the new processes, including monozukuri manufacturing skills - what Toyota deems as keeping the spirit of craftsmanship alive.

Toyota had no choice but to invest stateside if it wanted to retain its market share in the United States. The automaker's sole EV offering hasn't set the sales charts alight, with rivals such as Ford and the Hyundai Motor Group enjoying greater popularity. This is also partly due to the severe recall issues surrounding the bZ4X.

2023 Toyota bZ4X Forward Vision Toyota

But Japan's biggest carmaker still has a fighting chance, especially as it plans to introduce a smaller bZ3x model and several additional battery-powered vehicles. One of these was recently leaked in China, the bZ3 sedan seen below.

There's a very good chance that this investment may benefit future electric Lexus models, depending on their price point.

For smaller EVs (sedans, hatchbacks), the incentive is capped at $55,000. SUVs and pickup trucks enjoy a higher threshold of $80,000. Despite this new investment, Toyota is outspoken on its stance. Instead of placing all its eggs in one basket, Toyota believes the future of sustainable motoring is varied.

The company has reassured customers that it "will continue to make every effort to flexibly meet the needs of its various customers in all countries and regions by offering multiple powertrains and providing as many options as possible."

Side View Toyota

Toyota continues to proceed down the hydrogen path. Aside from the Mirai, the automaker has proved the usability of the energy source in motorsport, and also intends on creating a Corolla Cross powered by hydrogen in the coming months. Elsewhere, it has teamed up with several other Japanese automakers to explore the eligibility of biofuels.

Interestingly, Toyota isn't the only brand to announce a similar venture in the past week. Honda has also announced similar plans and, together with LG Energy Solution, the pair will invest $4.4 billion into a new battery manufacturing facility. While Honda currently doesn't sell any electric vehicles in America, it plans to introduce several new vehicles in the coming years, based on GM's Ultium platform.

Ministry of Industry and Information Technology

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