Toyota investing $5.6 billion to build EV batteries, despite its own doubts
The world’s largest automaker in terms of vehicles sold, Toyota (About half the money Toyota said it plans to spend on EV battery production will go to expanding a plant in Liberty, NC, that is already under construction. The investment will raise the price tag on the plant from $1.3 billion to $3.8 billion.The influx of cash will also increase the number of jobs at the plant, which is due to start production in 2025, by as many as 2,100. Toyota said the plant will make batteries for both pure battery-powered EVs as well as plug-in hybrid vehicles that will have both electric motors and internal combustion engines.It is important that Toyota increase some of its US-made EV battery capacity. Recently passed legislation to increase tax credits for EV buyers includes limits based on where the batteries are made. That requirement calls for 50% of battery components to be manufactured or assembled in North America starting in 2023 and 60% in 2024 and 2025 for a vehicle to be eligible for the tax credit. That number will gradually grow to 100% in 2029. So shipping batteries from Asia to US assembly plants could deprive the cars’ potential buyers of thousands of dollars in tax credits.EV battery boomAutomakers having been rushing to announce EV battery plant plans in recent months, often with various partners. Just this week, Honda (HMC) announced a $4.4 billion joint investment with LG on a new US battery plant. In addition, Hyundai said in May that it’s building a battery plant in Georgia. Ford said last year it would invest $11.4 billion with LG rival SK Innovations to built three battery plants along with an EV assembly plant. Mercedes-Benz opened a battery plant in Alabama earlier this year. Stellantis, which was formed by the merger of Fiat Chrysler and French automaker PSA group, announced battery plant plans last year with LG. And GM and LG have built plants in Ohio, Tennessee and Michigan for a total of $7.2 billion, and are looking at a fourth plant in Indiana. The Tennessee and Michigan plants are under construction, while the Ohio plant recently started production.– CNN Business’ Matt McFarland and Peter Valdes-Dapena contributed to this report.
