Toyota boosts EV battery spend at planned North Carolina plant

Toyota said it plans to invest up to $5.6 billion in the U.S. and Japan to supply automotive batteries for battery electric vehicles. The automaker said it plans to begin battery production between 2024 and 2026. 

The company said it intends to increase its combined battery production capacity in both countries by up to 40 GWh. 

In Japan, around 400 billion yen ($2.88 billion) is targeted for the Himeji Plant of Prime Planet Energy & Solutions Co. In the U.S., around 325 billion yen ($2.5 billion) is earmarked for Toyota Battery Manufacturing, North Carolina, which is owned 90% by Toyota Motor North America, Inc. and 10% by Toyota Tsusho.

The North Carolina investment was first announced last October when Toyota announced plans to spend $3.4 billion in automotive batteries in the U.S. through 2030. That was part of a global total of $13.5 billion that the automaker had set aside for investment in battery development and production.

Toyota said that by 2030 it expects to sell 2 million zero emission vehicles (BEVs and FCEVs) globally. In the U.S., the company expects to sell between 1.5 million to 1.8 million electrified vehicles, including ZEV models.

Earlier in August, LG Energy Solution and Honda Motor Co. said they planned to invest $4.4 billion to set up U.S. manufacturing to jointly produce lithium-ion batteries to power Honda and Acura EV models for the North American market. The partners said they aimed to have an annual production capacity at the plant of around 40 GWh.

The pouch-type batteries are expected to be supplied to Honda facilities in North America. The location of the plant was not announced, but the companies said they planned to start construction in early 2023 with a goal of starting mass production by the end of 2025.

The U.S. EV market could be strengthened by two recent developments. First, the Inflation Reduction Act provides tax credits to consumers who buy electric vehicles, particularly those that are largely manufactured in the U.S. Second, the California Air Resources Board approved a plan banning the sale of new gas-powered cars in the state by 2035.