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Toyota to invest $5.3bn to make EV batteries in U.S. and Japan

  • August 31, 2022
  • , Nikkei Asia , 7:17 p.m.
  • English Press

By SHOICHIRO TAGUCHI, Nikkei staff writer

 

TOKYO — Toyota Motor announced on Wednesday that it will invest up to 730 billion yen ($5.3 billion) to expand production of batteries for electric vehicles in Japan and the U.S. in a move to meet increasing EV demand.

 

The auto giant will invest 400 billion yen domestically in the plant of Prime Planet Energy & Solutions, a joint venture with Panasonic Holdings, as well as Toyota’s own plants in Japan. It will also spend 325 billion yen on a battery factory to be built in the state of North Carolina.

 

Total battery production capacity to be added in the two nations will increase up to 40 gigawatt-hours, with production to start between 2024 and 2026.

 

Toyota had already announced its intent to pour 2 trillion yen by 2030 into capital investments along with research and development of EV battery production. The 730 billion yen is part of this, excluding land and building acquisitions. Toyota has not disclosed a detailed breakdown.

 

Regarding the investment, the company said: “We will respond to the needs of our customers in all countries and regions with multipower trains and provide as many options as possible … [and] will continue efforts to build a supply structure to meet the growing demand for EVs in each region.”

 

The shift to EVs is gaining some traction. In the U.S., California last week approved rules to phase out all gas-burning vehicle sales by 2035.

 

Honda Motor announced on Monday that it will build a battery plant for electric vehicles in the U.S. with South Korean battery maker LG Energy Solution at a price of $4.4 billion.

 

Seiji Sugiura, analyst at Tokai Tokyo Research Institute, said that “even Japanese automakers, who have been slow to shift to EVs, are more clearly defining their battery investments.” As for the timing of Toyota’s announcement, Sugiura said, “It may be aimed at responding to shareholders, who are wondering what Toyota would do after Honda’s statement.”

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