Toyota invests $5.6 billion in electric vehicle battery factories in the United States and Japan

ALEXANDRIA, Va.—Toyota is investing up to 730 billion yen ($5.6 billion) in electric vehicle batteries in Japan and the United States, reports the Associated Press. Automaker allocates 400 billion yen ($3 billion) to Prime Planet Energy & Solutions Co.’s Himeji plant in Japan, and $2.5 billion (about 325 billion yen) will go to Toyota Battery Manufacturing , a plant under construction in North Carolina and is expected to begin production in 2025.

Toyota recently raised doubts about the transition to electric vehicles, reports the Wall Street Journal. The company reiterated its stance, saying it “believes there is more than one option for achieving carbon neutrality,” in a statement.

“He also believes that ways to reduce CO2 as possible and as quickly as possible while protecting the livelihoods of its customers vary widely by country and region. With this in mind, Toyota will continue to do its utmost to flexibly meet the needs of its various customers in all countries and regions by offering multiple powertrains and offering as many options as possible,” the company said in the statement. communicated.

The company is known to take a more cautious stance on the world’s shift to electric vehicles, with executives wondering how quickly the transition will happen due to shortages of minerals and materials that go into making electric vehicle batteries. . The Journal reports that Toyota believes hybrid vehicles are a better solution for regions that lack sufficient EV infrastructure and rely on fossil fuels to create electricity.

“Even if you want to talk about electric vehicles, the market is not mature enough,” Jack Hollis, executive vice president of sales at Toyota Motor North America, told reporters, according to a recent Journal article.

Hollis believes the high cost of electric vehicles and the lack of electric vehicle charging infrastructure will deter consumers from widespread adoption of electric vehicles. Additionally, the rising cost of EV batteries to automakers is likely to inflate the cost of a battery-powered vehicle.

“I don’t think the market is ready for what the rhetoric is saying,” Hollis said.

However, Toyota is still investing billions in electric vehicles and their components, and Hollis said that’s because Toyota wants to be prepared for when the world finally embraces electric vehicles.

In its most recent quarter, Toyota shipped about 4,000 electric vehicles, less than 1% of its total unit sales, while hybrid models accounted for 30% of Toyota and Lexus shipments for the quarter.

Other automakers, including Ford, General Motors, Hyundai-Kia, Stellantis and VinFast, have announced plans to manufacture batteries in the United States. Earlier this week, Honda announced plans to invest $4.4 billion to build an electric vehicle battery plant in the United States in partnership. with LG Energy Solution of South Korea. Tesla Inc. supplier Panasonic announced a similarly sized investment in Kansas and is considering an additional investment in Oklahoma, the Journal reports.

The Cutting Inflation Act provides eligible consumers with a tax credit of up to $7,500 on the purchase of an electric vehicle. To get the full amount, the EV must contain a battery made in North America, and 40% of the battery materials must also come from the continent.

Here’s what the Cut Inflation Act means for convenience stores.