Toyota announces major battery investment

Toyota will invest a total of 380 billion yen (just under 2.9 billion euros) in the development and production of batteries for hybrid and electric cars in the USA by 2030. The US investment is part of the global battery roadmap presented by Toyota in September.

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Toyota Motor North America plans to establish a new company in the United States to drive the localisation of battery production. In addition to the new subsidiary, a battery factory is planned jointly with Toyota Tsusho to start production in 2025 – initially for hybrid vehicles. According to the Japanese company, investments amounting to the equivalent of 1.1 billion euros are planned for the construction and commissioning of this plant alone. Up to 1,750 new jobs are to be created at the production facility.

The announced new US-based subsidiary will focus parts of its activities on establishing a local supply chain and “developing and expanding Toyota’s manufacturing expertise in lithium-ion automotive batteries”. The company will initially focus on the production of batteries for hybrid vehicles, he said. Further details on the project, including details on location, production capacity, business structure Toyota plans to announce at a later date.

The investment plan for the USA is embedded in Toyota’s global investment roadmap, which was only amended in September. According to the roadmap, the Japanese company plans to invest a total of 1.5 trillion yen (about 11.5 billion euros) in the expansion of its battery production and in battery development by 2030. In addition, Toyota is increasing its production target for batteries from 180 GWh to at least 200 GWh by 2030.

By comparison, Toyota currently produces batteries with a cumulative energy content in the order of six GWh annually. In terms of electrification, Toyota plans to continue with a mix of hybrids, BEVs and fuel cell cars, contrary to many of its competitors. By 2025, the Japanese carmaker intends to introduce a total of 15 battery-electric vehicles worldwide and expand its electrified model range to more than 70 vehicles worldwide. In Europe, according to Toyota, this will lead to a powertrain mix of more than 70 per cent hybrids, around 10 per cent plug-in hybrids and a good 10 per cent zero-emission models – both battery-electric and fuel cell cars – by 2025.

For 2030, the group also forecasts global sales of eight million electrified vehicles – including two million battery-electric and fuel cell cars. In Europe, only e-vehicles are to be sold at that time, although Toyota assumes that hybrids will still be 60 per cent in demand at that point. For other markets, Toyota continues to keep the drive technology completely open from 2030 onwards.

Looking at the US plans, Ted Ogawa, CEO of Toyota Motor North America, expresses that Toyota’s commitment to electrification is aimed at 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.”

According to internal group statistics, Toyota has sold just over 18.7 million electrified vehicles worldwide to date, including more than 4.5 million in the US. The share of electrified vehicles in US sales volume is currently almost 25 per cent and is expected to rise to almost 70 per cent by 2030. In absolute figures, the company is talking about planned US sales of 1.5 to 1.8 million electrified vehicles in 2030.

Update 07 December 2021

The exact location for the battery factory announced in October has now been determined: it is the Greensboro-Randolph Megasite in North Carolina. The factory is to start in 2025 with four production lines, each of which can supply enough lithium-ion batteries for 200,000 vehicles – i.e. 800,000 vehicles. An expansion to at least six production lines for a total of up to 1.2 million vehicles per year is already planned.

It remains to be seen when construction will begin – so far Toyota has only mentioned the planned start of production. The Megasite industrial park is apparently still under development: on Google Maps, the site still consists of woods and meadows – the images are from 2021. There are also no images of finished infrastructure and buildings on the industrial park’s website yet.

The company does not mention the production capacity in gigawatt hours. The enormous number of vehicles is only possible because, as reported above, batteries for hybrid vehicles are to be produced in Greensboro-Randolph for the time being – the installed capacity per vehicle is thus significantly smaller than for a BEV.

The Japanese reiterate statements according to which Toyota Motor North America and its subsidiary Toyota Tsusho will invest a total of 1.29 billion US dollars (about 1.1 billion euros) in the battery factory and are expected to create 1,750 jobs in the process. The current announcement also indicates that TMNA will hold 90 per cent and Toyota Tsusho ten per cent of the shares.

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