Business

Toyota Triples Down On EVs As Red States’ Green Windfall Continues

No featured image available

Following a series of multibillion-dollar investments in U.S.-based electric vehicle (EV) battery plants in Republican-controlled states by its competitors, Toyota announced Wednesday it would nearly triple its investment in its own U.S. battery manufacturing plant in North Carolina.

While Toyota had originally invested $1.29 billion in the Liberty, North Carolina, facility, its investment has skyrocketed to $3.8 billion, making the facility the “central” to Toyota’s goal to reach carbon neutrality by 2035, according to a Toyota press release. With the announcement, Toyota joins a slew of competitors and green energy initiatives making multibillion-dollar investments in Republican states following the passage of the Inflation Reduction Act, which gave significant tax incentives to produce batteries for electric vehicles and other green energy products in the U.S.

In a statement to the Daily Caller News Foundation, Toyota spokesperson Emily Camille Wilemon-Holland said that the timing of the announcement had more to do with Toyota’s philosophical commitment to “build where we sell” than with the Inflation Reduction Act.

“The timing of the IRA and Toyota’s announcement is coincidental,” said Wilemon-Holland. “At this time, we do not have a [battery powered EV or plug-in hybrid] that would qualify for the new incentive, and I understand it’ll be difficult for most automakers to receive some or all of the $7,500 credit, especially given the raw material sourcing requirements. We know this is a huge undertaking and the industry and government each have a role to play when it comes to establishing the right conditions for success.”

Wilemon-Holland also told the DCNF that recent investments by competitors did not influence the decision, which is part of Toyota’s long-term commitment to electrification. Toyota did not yet have an estimate for the expected production capacity of the facility, Wilemon-Holland said.

We are proud to dedicate an additional $2.5 billion to expand #electrification efforts and create new jobs at Toyota Battery Manufacturing North Carolina. The now $3.8 billion total investment means a bright future for TBMNC! Learn more: https://t.co/MSavoWMvJN #LetsGoPlaces pic.twitter.com/NvFqkaQNSo

— Toyota USA (@Toyota) August 31, 2022

The plant, which like many competitors is targeting production by 2025, will now support six production lines as opposed to the originally planned four, which were originally intended for the smaller batteries in the Toyota Prius, Reuters reported, citing an interview with Norm Bafunno, senior vice president of powertrain manufacturing and engineering at Toyota Motor North America. Battery company Panasonic has formed a joint venture with Toyota known as Prime Planet Energy & Solutions, which will help run the plant, Bafunno told Reuters.

This structure is similar to the relationship between Honda and LG Energy Solution, who announced a joint venture for a $4.4 billion U.S.-based EV battery plant on Monday.

California recently passed a law banning the sale of gas-powered vehicles after 2035, with Democratic Gov. Jay Inslee of Washington tweeting Washington’s intention to follow suit.