Toyota said Wednesday it will ramp up the production of batteries for electric vehicles in Japan and the United States through an investment of up to 730 billion yen ($5.3 billion).
Part of the cash is included in a huge two-trillion budget for the development and production of auto batteries that was announced by the Japanese giant in December, a spokesman told AFP.
Automakers are speeding up the transition to electric as pressure grows from governments to move away from cars with combustion engines, and also thanks to the success of Elon Musk’s Tesla.
Toyota is the world’s top-selling carmaker, and has championed hybrid motors and pioneered hydrogen as a fuel of the future.
But until recently it has been slow to embrace battery-powered electric vehicles, seen as a key to reducing carbon emissions.
“With this investment, Toyota intends to increase its combined battery production capacity in Japan and the United States by up to 40 GWh (Gigawatt Hours),” the company said in a statement.
Toyota said it aims to begin producing cells for battery-powered vehicles in the two countries between 2024 and 2026.
News of Toyota’s investment follows US President Joe Biden’s signing of his hallmark Inflation Reduction Act earlier this month, which the White House touted as the biggest commitment to mitigating climate change in US history.
“Today’s announcement from Toyota is another sign that the president’s economic plan is ushering in a new era of American manufacturing and economic competitiveness,” said Brian Deese, director of the White House’s National Economic Council.
Around 400 billion yen will be spent in Japan and around 325 billion yen in the United States, said the company, which expects a new battery-making plant in North Carolina to come online in 2025.
The announcement comes after Honda unveiled a joint venture on Monday with South Korea’s LG Energy Solution to invest $4.4 billion in a new US electric car battery plant.
And last month, Japanese electronics giant and Tesla supplier Panasonic announced its own $4 billion investment to build a new battery factory in the United States for electric vehicles.