International Business

Toyota Increases Investment in its North Carolina Factory and Offers up to $5.6 Billion for the Production of EV Batteries

Toyota Increases Investment in its North Carolina Factory and Offers up to $5.6 Billion for the Production of EV Batteries

Toyota, a major player in the automotive industry, announced on Wednesday (August 31, 2022) that it would invest an additional $2.5 billion in a U.S. facility that will produce batteries for both hybrid and battery electric vehicles.

Toyota Battery Manufacturing North Carolina is scheduled to begin operations in 2025. According to the company, a total of $3.8 billion will be invested in the facility.

The announcement, according to Toyota Motor North America’s senior vice president of unit manufacturing and engineering, Norm Bafunno, was “another significant milestone” for the company.

The extra investment in the United States is a part of a larger $5.6 billion investment in battery manufacture. Toyota noted that there was a rising demand for battery electric vehicles.

To this end, the business said it would aim to ramp up “combined battery production capacity” in the U.S. and Japan by as much as 40 gigawatt hours.

Toyota is renowned for its hybrid and hydrogen fuel cell automobiles in addition to its gasoline and diesel vehicles. It is also making an effort to gain ground in the fiercely contested battery-electric industry, where companies like Tesla and Volkswagen are vying for dominance.

This has not been without its challenges. In June 2022, Toyota issued a safety recall for more than 2,000 of its all-electric SUV, the bZ4X.

Toyota may be looking to invest billions in EV battery production, but on Wednesday the business stressed it would also “continue to make every effort to flexibly meet the needs” of customers “in all countries and regions by offering multiple powertrains and providing as many options as possible.”

Indeed, the website of Toyota Europe states that the “internal combustion engine continues to be the most popular means of powering vehicles and it will continue to play a role for the next 20 to 30 years.”

All of the aforementioned occurs at a time when major economies are developing initiatives to lessen the environmental impact of transportation based on roads.

The California Air Resources Board has approved a rule that calls for all new cars sold in the state by the year 2035 to have zero emissions.

By 2030, the U.K. aims to stop selling new gasoline and diesel automobiles and vans. All new automobiles and vans must have zero tailpipe emissions starting in 2035. Similar goals are being pursued by the European Union, which the U.K. exited on January 31, 2020.

The International Energy Agency estimates that 6.6 million electric vehicles will be sold worldwide in 2021. Sales of electric vehicles (EVs) reached 2 million in the first quarter of 2022, a 75% increase from the same period in 2021.