Toyota Kicks Off $13.9 Billion U.S. Battery Production, Confirms New $10 Billion Investment Pledge

LIBERTY, North Carolina – Toyota Motor Corporation has officially launched production at its massive new battery plant in North Carolina, a cornerstone of its strategy to localize its supply chain and ramp up hybrid vehicle production for the American market. The opening also served as the platform for the company to confirm a fresh $10 billion investment plan in U.S. manufacturing over the next five years.

The move signals a significant acceleration of Toyota’s electrification plans in its largest market, even as it doubles down on its controversial “multi-pathway” approach that includes hybrids alongside fully electric vehicles.

From Blueprint to Production

The Japanese automaker first announced its intention to build the North Carolina facility in December 2021. Now operational with an eventual price tag of $13.9 billion, the 1,850-acre facility is Toyota’s 11th U.S. factory and its first dedicated to battery production. At full capacity, the plant will produce an impressive 30 gigawatt-hours of energy annually, enough to power hundreds of thousands of vehicles.

The plant will house 14 battery production lines, supplying both hybrid and all-electric models. Initially, the focus is on batteries for hybrid versions of top-selling vehicles like the Toyota Camry, Corolla Cross, and RAV4, which are assembled in Kentucky and at a joint venture with Mazda in Alabama. Future production will also include batteries for a new, yet-to-be-announced three-row all-electric SUV.

“This investment is a testament to our long-term commitment to the U.S. market,” said Ted Ogawa, President and CEO of Toyota Motor North America. “Over the next five years, we are planning an additional investment of $10 billion in the U.S. to further grow our manufacturing capabilities, bringing our total investment in this country to over $60 billion.”

The North Carolina site is expected to eventually employ 5,000 people.

A Strategy Forged in a Shifting Political and Market Landscape

Toyota’s announcement comes amid a rapidly evolving automotive environment in the United States. The company has been one of the slowest major automakers to embrace a fully electric future, a strategy that is now showing strategic dividends.

The political climate has shifted significantly since the plant was first planned. The Trump administration has rescinded EV tax credits, eliminated penalties for manufacturers that don’t meet certain EV sales thresholds, and has moved to relax aggressive fuel economy standards set under the previous Biden administration.

“Go out and buy a Toyota,” President Trump said last month in Japan, praising the company’s planned investment. His administration’s policies have created a more favorable landscape for hybrids, which combine a gasoline engine with a battery-electric drive system.

U.S. Transportation Secretary Sean Duffy, speaking at the plant’s opening, reinforced this shift. “The prior rules were too aggressive and did not reflect the realities of the market or the will of the American consumer,” Duffy said, confirming the administration’s plans to soon propose eased fuel economy standards.

This regulatory pivot aligns perfectly with Toyota’s strategy. While competitors like Volkswagen are now scrambling to add more hybrids to their lineups, Toyota has decades of experience and is rapidly converting its best-selling vehicles to hybrid powertrains.

“We know there is no single path to progress,” Ogawa said, defending the company’s diversified approach. “That’s why we remain committed to our multi-pathway approach, offering fuel-efficient gas engines, hybrids, plug-in hybrids, battery electrics, and fuel cell electrics.”

Market Reaction and Competitive Positioning

The market has responded positively to Toyota’s solidified plans. The company’s stock was up approximately 0.4 percent in midday trading in New York following the announcement.

Industry analysts see the move as a pragmatic one. While pure EV sales growth has slowed recently, hybrid sales have surged, appealing to consumers who want improved fuel efficiency without range anxiety or the need for charging infrastructure. By localizing battery production, Toyota also insulates itself from supply chain disruptions and qualifies for incentives under the U.S. Inflation Reduction Act that favor domestically produced batteries.

The opening of the North Carolina plant marks a new chapter for Toyota in America, positioning it to capitalize on current market trends while building the foundation for a broader electric future, all under the umbrella of a massive and growing manufacturing footprint in the United States.

 

 

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