Toyota Joins Forces With Mazda For EVs And $1.6 Billion US Factory

Technology

Expect more partnerships like this on the horizon.

It doesn’t take much guesswork to figure that the Japanese auto industry is heavily reliant on American car buyers to fuel the island nation’s prosperity, so when President Trump came into the oval office with hopes to recapture American jobs, automotive executives began to panic. On paper, they didn’t have much reason to, especially after a 2012 report found that 70% of Japanese-brand cars sold in America are built here too, but nevertheless, Japan wants to play it safe.

Either way, perhaps as an insurance policy in case heavy import taxes are levied on foreign auto imports or maybe just to appease loyal American consumers, Toyota and Mazda have agreed to pitch in a total of $1.6 billion on a US factory where each company will build some of America’s best selling vehicles. The plant is set to be completed and operational by 2021, but there’s no mention of where in the US it’ll be built. That means that Toyota and Mazda will likely pitch the proposal to various states, which will then be thrown into a bidding war where they reduce taxes as much as possible in order to capture the purported 4,000 jobs the plant will add the that local economy.

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The plant will have a capacity to churn out over 300,000 vehicles per year and will have a hand in building Corolla models for the US as well as an upcoming US market Mazda crossover. The decision to build this plant came after Toyota was criticized for trying to build US-bound Corollas in a production facility in Mexico. That plant will now take over production of the Tacoma pickup truck. While simple economics is the primary driver of the partnership, it's also symbolic of both companies’ plans to collaborate on electric vehicle technology. Even though Toyota has done well for itself in the hybrid business, it, along with Mazda, has been notably absent in the EV game.

Expect these sorts of partnerships to become more common as automakers join forces to tackle tax barriers and the learning curve of developing and deploying new technologies.

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