Automakers are racing to build battery plants as the push to adopt more electric vehicle purchases grows.
Toyota TM is the latest automaker to join the highly competitive field to build batteries for electric vehicles.
The Japanese automaker said on August 31 that it will spend another $2.5 billion at its North Carolina battery plant, called Toyota Battery Manufacturing North Carolina.
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The investment in its newest facility in North America will increase capacity to support battery production. Toyota plans to hire another 350 employees for a total of 2,100 workers.
Production of batteries for hybrid electric vehicles (HEVs) and battery electric vehicles (BEVs) will start in 2025.
Toyota said last year that it plans to invest heavily in electrification and plans to spend a total of $70 billion, plus a total of $5.6 billion for battery production, which includes new investment from North Carolina.
“This marks another important milestone for our company,” said Norm Bafunno, senior vice president, Manufacturing and Engineering Unit, Toyota Motor North America in a statement. “This plant will play a central role in Toyota’s leadership towards a fully electrified future and help us achieve our goal of carbon neutrality in our vehicles and global operations by 2035.”
The Liberty, NC plant will be the first to produce lithium-ion batteries for Toyota in North America. Toyota initially invested US$1.29 billion in battery production, and the total investment is US$3.8 billion.
Toyota sells hybrid and hydrogen fuel cell vehicles, and its strategy is to push into the battery-vehicle market, which is becoming more saturated as Volkswagen and Tesla compete for the most sales.
The demand for electric vehicles is growing
Electric vehicle manufacturers have gained ground in the US as several of them invest billions of dollars building their own battery plants. The investment in these plants comes as electric vehicles gain acceptance and popularity with consumers and as automakers are working to rein in their supply chains, which have been hit during the height of the pandemic.
State government leaders such as California Governor Gavin Newsom are also seeking to ban gasoline-powered cars, which will have an impact as California accounts for about a third of the US car market. On August 25, the The California Air Resources Board approved regulations stopping the sale of new gasoline-powered cars by 2035.
The push to phase out the sale of internal combustion engine vehicles is also gathering steam, as several states have said they plan to adopt California’s tougher standards on auto emissions. Several states, including Washington, Oregon, Massachusetts, and New York, have adopted similar standards for zero-emission vehicles.
JV will build a battery factory
The companies said construction would begin in early 2023 with mass production of advanced lithium-ion battery cells by the end of 2025.
The plant seeks to have a production capacity of some 40GWh each year.
Neither company specified where the plant would be built, but sources told the Wall Street Journal that it would be built in Ohio.
Honda already has an auto plant in Marysville, Ohio, built in 1982, that produces the Honda Accord sedan and coupe, as well as the Acura TLX and ILX, for customers in more than 100 countries.
Honda entered the electric vehicle market later than its competitors and said more than a year ago that it planned to make only electric vehicles. By 2040, the Japanese automaker plans to switch completely to electric and fuel cell vehicles.