Toyota Commits Billions More to Battery Manufacturing

Toyota has announced it is upping the ante in its investments to build batteries for BEVs (battery electric vehicles) in the United States and Japan to the tune of approximately $5.6 billion.
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The announcement follows those of other automakers who have made significant investments in battery production in the U.S., most notably General Motors and Honda. It is not clear if the new investment includes the $3.4 billion the company, along with its subsidiary Toyota Tsusho, is investing in its Toyota Battery Manufacturing North Carolina(TBMNC), which is due to be manufacturing batteries in 2025.

The TBMNC plant will have four production lines, each capable of making enough lithium-ion batteries for 200,000 vehicles per year. Approximately $2.5 billion of the new investment is earmarked for this facility, presumably to expand its capacity even further to six production lines capable of producing batteries for 1.2 million BEVs annually.

The other $2.8 will go to Himeji Plant of Prime Planet Energy & Solutions Co., Ltd. (PPES) and in Toyota plants and assets at home in Japan. In total, the investment will increase the combined capacity by up to 40GWh.

Toyota intends to be a bigger player in the BEV battery manufacturing sector and strengthen its competitiveness using the efficiencies 'monozukuri' manufacturing skills.

Monozukuri is Japanese for 'production' and encompasses a blend of technological prowess, know-how, and Japan's manufacturing process that revolves around a continuous improvement ideology. Continuous improvement has been the core concept and is largely seen as the reason for Japan's rise to automotive manufacturing dominance worldwide.

There was no mention of how the U.S. Government's adoption of the Inflation Reduction Act impacted Toyota's decision to increase capacity, but it surely was a motivating factor. A provision in the bill provides financial incentives for companies to manufacture batteries in the U.S. using North American minerals.

The announcement concluded with Toyota stating, “Toyota believes that there is more than one option for achieving carbon neutrality. It also believes that the means of reducing CO2 emissions as much as possible and as quickly as possible while protecting the livelihoods of its customers vary greatly depending on the country and region. With such in mind, Toyota will continue to make every effort to flexibly meet the needs of its various customers in all countries and regions by offering multiple powertrains and providing as many options as possible.”

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