Electric vehicles

Toyota builds its first-ever wholly owned battery plant

Located in North Carolina, the $1.29 billion plant is a major step in its $13.5 billion battery push over the next decade.
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· 3 min read

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Another week, another billion-dollar battery plant announced in the US.

Toyota plans to spend $1.29 billion to build an EV battery facility in North Carolina—the first controlled solely by the Japanese automaker rather than a joint venture with a battery company.

In October, Toyota announced it would invest $3.4 billion on automotive battery development and production in the US over the next 10 years. That figure is part of the $13.5 billion the company plans to spend on batteries globally as it aims to produce 200 gigawatt hours of batteries and sell 2 million electric cars per year by 2030.

Toyota hopes to have 10 battery production lines open at new battery facilities around the world by 2025. Those will include four lines at the North Carolina plant, which the company says will be able to build enough lithium-ion battery packs for 800,000 EVs annually when it begins production in 2025. Toyota plans to eventually add two additional production lines and increase the plant’s capacity to supply batteries to 1.2 million EVs per year.

The Toyota plant will add to the total battery production in the US, which stood at about 8% of the global total in 2020, according to the Department of Energy. Today, more than 75% of lithium-battery-cell-manufacturing capacity is in China.

Even as the Biden administration pushes incentives for bolstering the domestic EV supply chain, the US still isn’t expected to break 10% of the rapidly growing global battery capacity by 2025.

The North Carolina plant will initially build batteries for Toyota’s hybrid vehicles, but in the long term, the automaker plans to produce batteries for its all-electric vehicles.

Hybrid and plug-in hybrid vehicles accounted for more than 20% of new car sales for Toyota and Lexus in 2020, but the company has faced criticism for not introducing as many fully electric vehicles as some of its peers.

Although they are cleaner than gasoline-powered cars, hybrid vehicles in the US produce nearly 40% more carbon emissions than an all-electric vehicle on average, and plug-in hybrids produce about 33% more, according to the Department of Energy.

Toyota plans to sell 70 electrified vehicles by 2025, but only 15 models will be BEVs. By then, GM says it will offer 30 BEVs.

OEMs look South

States like Alabama, Georgia, Kentucky, and Tennessee have become popular for new facilities supporting the EV supply chain.

GM plans to open a $2.3 billion battery plant in Tennessee in 2023. Ford and South Korean battery maker SK Innovation are building three battery plants and an electric-truck assembly facility in Tennessee and Kentucky. SK Innovation opened a separate battery plant in Georgia this year.

This deal brings North Carolina into the club. The Toyota plant will be located south of Greensboro and is expected to create about 1,750 jobs. The automaker could receive more than $435 million in economic incentives from state and local governments over a 20-year period if the project meets investment benchmarks.

Keep up with the innovative tech transforming business

Tech Brew keeps business leaders up-to-date on the latest innovations, automation advances, policy shifts, and more, so they can make informed decisions about tech.