In a strange series of events, Toyota is changing its stance on electric vehicles when the Japanese automaker announced on Wednesday that it will triple its planned investment in its new battery plant in North Carolina.
Not even a week after Toyota’s executive vice president, Jack Hollis, claimed that “consumers don’t want (EVs) at this level,” citing the growing movement towards electric vehicles in the US, the automaker is reversing course.
President Biden has set a goal of achieving 50% EV market share in the US by 2030 and is implementing major incentives and rebates to make clean, sustainable energy options available to everyone, especially those who have made them might not be able to afford.
The new inflation-mitigating law passed earlier this month offers tax incentives for electric vehicle buyers. New EVs are eligible for a credit of up to $7,500, while buyers of used EVs can still snag $4,000 when it comes time to file taxes.
However, for models to be eligible, automakers must source materials from US free trade partners and complete final assembly in North America.
Since the bill was signed, several major automakers have already signed agreements to lock down critical EV components. Volkswagen, Mercedes-Benz and Hyundai have all announced plans to build or source EV components in Canada or the US.
Meanwhile, Japanese automakers like Toyota, Honda and Subaru are lagging behind their peers as the auto industry transitions to electric vehicles.
This week has shown that even those who deny that electric vehicles are the future are beginning to have their say. First, Honda announced Monday that it is partnering with LG Energy to invest $4.4 billion in a US battery plant. Now Toyota is following in its footsteps, announcing its own plans to expand funding to build batteries on US soil.
Toyota battery plant location in NC Source: Toyota
Toyota commits an additional $2.5 billion for its electric vehicle battery plant in North Carolina
Last year, Toyota partnered with Toyota Tsusho, the automaker’s network and commercial division, to build a battery plant in Liberty, NC, at a cost of $1.29 billion at the time.
Toyota announced today that it will triple its funding for the NC Battery Plant, bringing the total to $3.8 billion.
Norm Bafunno, senior vice president, unit manufacturing and engineering at Toyota Motor North America, claims:
This facility will play a central role in Toyota’s leadership towards a fully electrified future and help us achieve our goal of being carbon neutral in our vehicles and global operations by 2035.
Toyota expects to start production at the battery plant in 2025, but the automaker doesn’t plan to produce only electric vehicles. They also plan to manufacture hybrid vehicles.
That being said, the Japanese automaker’s EV efforts have been relatively bleak so far. Toyota launched the bZ4X, its first EV program, and had to quickly recall them after multiple incidents of wheels falling off. Not a great sight.
Does today’s announcement indicate that Toyota is changing its tune? Not necessarily, but to be fair, at least they’re trying at this point, rather than denying the potential of EVs.
Electrek’s take
You can look at Toyota’s announcement today from different angles. Is the company stepping up its efforts because it genuinely believes electric vehicles are the future? Or does it feel compelled to do so because it is losing market share?
The latter sounds more realistic as the automaker’s history shows a trend of getting stuck in its ways. But you also need to give credit where credit is due, as $3.8 billion is still a significant investment.
For Toyota, the effort is better late than never. It looks like Toyota is finally catching on, or at least publicly acknowledging that they are the future.
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