Toyota plans to invest billion of dollars in battery plant in US

Toyota Motor is planning to invest billions of dollars in a battery plant to be built on the outskirts of Greensboro, North Carolina, as part of the automaker’s efforts to ramp up output of electric vehicles in the US, according to people familiar with the matter.

The car manufacturer has not made a final decision, but it is expected to partner with Panasonic in the construction of the facility, said sources, who declined to be named as the discussions are private.

No formal commitment has been made and the plan could still evolve, they said.

While details of the ownership and operation of the plant are still unclear, it will likely be via the two Japanese companies’ battery joint-venture Prime Planet Energy and Solutions, according to sources.

Toyota spokesman Hideaki Homma said nothing new had been decided regarding the company’s battery investments in the US. Prime Planet spokesman Masato Tokuhisa said the company was “always considering what’s best in regard to our production”, without commenting on specifics.

Panasonic spokeswoman Yayoi Watanabe declined to comment.

The factory would be the anchor tenant in an industrial park called the Greensboro-Randolph Megasite, which the Randolph County Economic Development Corporation describes as a 738-hectare parcel of former farmland rezoned for heavy industry and located near several interstate highways at the state’s centre. Representatives for the site couldn’t be reached for comment.

The North Carolina plant would be the latest in a string of announcements by major carmakers laying the groundwork for the industry’s pivot towards full electrification. Ford Motor and South Korea’s SK Innovation said in September they will spend $11.4 billion on a trio of battery factories and a vehicle assembly plant in Tennessee and Kentucky, while Jeep maker Stellantis plans a US plant with Samsung SDI, another Korean battery player.

Prime Planet is a Japan-based battery manufacturer that formally began operations last year. Toyota owns 51 per cent of the venture, while Panasonic holds 49 per cent. It currently claims the top share – around 25 per cent – of the market for hybrid batteries and is looking to grow its presence in the EV battery sector as well.

Toyota has been slower than rivals in building an EV presence in the US and came under fire for its delayed embrace of tighter vehicle emissions standards. In October, it pledged to invest $3.4bn in automotive batteries in the US over the next decade, part of a larger plan to earmark 1.5 trillion yen ($13.1bn) for battery development and production globally through 2030.

The Japanese company has been one of the loudest critics of proposed legislation in US Congress, backed by the administration of US president Joe Biden, that favours EVs made in US factories with unionised workforces for the most generous subsidies.

Toyota, which operates 10 non-union plants in the US, aims to start local production of batteries in 2025 and will initially spend around $1.3bn in conjunction with its trading arm, Toyota Tsusho, to “develop land and build facilities, resulting in the creation of 1,750 new American jobs”.

In a budget bill signed into law Thursday by North Carolina governor Roy Cooper, the state is offering $135 million in aid to an unspecified manufacturer interested in the Greensboro industrial park and which will commit, among other things, to “invest at least $1bn in private funds and create at least 1,750 eligible positions”.

An additional $185m in funding will be provided if the manufacturer boosts its investment to $3bn and increases the job creation to at least 3,875 eligible positions at the site, according to the bill.

A spokesman for North Carolina Senate leader Phil Berger said the state does not comment on economic development projects until they’re finalised. Details in the bill about the site subsidies were reported earlier by the Triad Business Journal, a Greensboro-based trade publication.

Toyota announced in February that it will introduce two all-electric vehicles in the US starting in 2022, a mainstream crossover called the bZ4X and an upscale Lexus model built on the same platform. Those will be its first wholly battery-operated vehicles in the US since it stopped producing an all-electric version of its bestselling RAV4 crossover sport utility vehicle seven years ago.