Toyota, which has been drawing criticism from environmental groups for failing to join the shift to battery-powered vehicles, is making its biggest bet ever on that technology with plans to spend about $3.4 billion through the end of the decade in the U.S. to speed up development and production of advanced batteries for electric cars and trucks.
The U.S. investment includes building a $1.3 billion factory that’s expected to employ 1,750 people and creating a new unit with affiliated materials and trading company Toyota Tsusho that will begin production by 2025, Toyota said today. The moves are part of the Japanese industrial giant’s broader initiative announced last month to spend $13.5 billion globally to catch up with competitors including General Motors, Ford and Volkswagen that have also committed billions to electrifying their own lineups, as well as Elon Musk’s Tesla.
“Toyota’s commitment to electrification is about achieving long-term sustainability for the environment, American jobs and consumers,” Toyota North America CEO Ted Ogawa said in a statement. “This investment will help usher in more affordable electrified vehicles for U.S. consumers, significantly reduce carbon emissions, and importantly, create even more American jobs tied to the future of mobility.”
Toyota has been a leader in hybrids for decades with the Prius and is the biggest seller of hydrogen fuel cell electric cars with its zero-emission Mirai sedan. And though it also provided a game-changing boost to Tesla in 2010 when CEO Akio Toyoda essentially gave Elon Musk’s company an idled auto plant in Fremont, California, the company has been slow to add models powered solely by batteries to its lineup. Toyota’s hesitancy to do so, combined with its support for former President Donald Trump’s push to weaken automotive fuel economy rules and an effort to stop California’s automotive carbon emissions regulations led environmental groups such as the Sierra Club to attack it for being “stuck in reverse” on sustainability.
“From being among the loudest supporters of Donald Trump’s most significant attack on our clean air to now lobbying President Biden to delay the electric vehicle transition, Toyota is at best the laggard of the auto industry,” Katherine Garcia, acting director of the Sierra Club’s “Clean Transportation for All” campaign said in August.
The company’s first battery-powered vehicle, the bZ4X crossover, is to go into production next year in Japan and China and be sold worldwide in 2022. The company said in April that it will have about 70 “electrified” models available in global markets by 2025, including 15 battery electric vehicles. Of those, seven will be part of its bZ line.
Toyota’s battery push in the U.S. will initially focus on producing lithium-ion for hybrid electric vehicles.
Hydrogen, which like batteries, powers vehicles with no tailpipe pollution, has been a bigger focus for Toyota since the 1990s. Though Mirai fuel cell sedan sales are relatively modest (limited mainly to California in the U.S., one of the few places with hydrogen fuel stations), the company is pivoting to heavy-duty hydrogen vehicles with its Hino truck subsidiary. In August, Toyota said it would start building fuel cell modules for hydrogen-powered semi-trucks at its massive Georgetown, Kentucky, plant starting in 2023.