Toyota Announces $3.4 Billion Battery-Related Investment In US

The company will build a new plant, but initially will focus on hybrids.

 Toyota Electrified Lineup 2021  Toyota Electrified Lineup 2021

Toyota announced today a $3.4 billion (380 billion yen) investment in automotive batteries in the U.S. through 2030, as part of a global $13.5 billion (1.5 trillion yen) investment in the battery supply system, announced in September.

In the U.S., Toyota intends to spend the money on developing and localizing automotive battery production, "including those for battery electric vehicles." However, initially the project is focused on hybrids.

Toyota Motor North America, together with Toyota Tsusho, intends to build in the U.S. an automotive battery plant that will start production in 2025. As we understand, it will produce battery modules and packs rather than battery cells. Moreover, the first focus is on lithium-ion batteries for hybrids.

This investment is estimated at $1.29 billion by 2031, which leaves over $2.1 billion from the total of $3.4 billion for other purposes.

"To drive battery production localization, Toyota Motor North America also announced today that it will establish a new company and build an automotive battery plant together with Toyota Tsusho in the U.S. Aiming to start production in 2025, the project includes an investment of approximately $1.29 billion until 2031, which includes funds that will be used to develop land and build facilities, resulting in the creation of 1,750 new American jobs."

"Part of the new company's activities will include helping Toyota to further develop and expand its local supply chain and production knowledge related to Lithium-ion automotive batteries. The venture will first focus on producing batteries for hybrid electric vehicles."

The Japanese manufacturer notes that so far it has sold more than 18.7 million electrified vehicles (including 4.5 million in the U.S.). Electrified means xEVs (BEVs, PHEVs, HEVs, FCEVs), but in fact they were almost entirely conventional hybrids.

Currently, hybrids stand for nearly 25% of Toyota's U.S. sales volume, which is expected to increase to nearly 70% by 2030. That would answer why the company has to address the battery supply chain issue.

Also, the number of xEV models (globally) is poised to increase from 55 today to 70 by 2025, including 15 all-electric cars out of which 7 to be Toyota bZ (Beyond Zero) models. The first bZ model will be the Toyota bZ4X.

By 2030, Toyota would like to sell 2 million BEVs/FCEVs globally. In the U.S. there is a plan for 1.5-1.8 million xEVs annually, but no data about BEVs/FCEVs specifically.

Well, while we appreciate the investments into electrification, we wonder whether it will be enough as the world appears to shift quickly towards all-electric cars.

Ted Ogawa, Chief Executive Officer, Toyota Motor North America said:

"Toyota's commitment to electrification is about achieving long-term sustainability for the environment, American jobs and consumers. This investment will help usher in more affordable electrified vehicles for U.S. consumers, significantly reduce carbon emissions, and importantly, create even more American jobs tied to the future of mobility."

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