Toyota Motor Company officially opened its battery plant in Liberty, North Carolina on the 12th (local time) and began full-scale operations. In tandem with this opening, Toyota announced plans to invest up to $10 billion more in the United States over the next five years. This additional investment marks the largest commitment made by a Japanese automaker in the U.S. since the launch of the second Donald Trump administration.
According to the Nikkei on the 13th, Tetsuo Ogawa, President of Toyota’s North American Division, stated that this historic venture represents a significant turning point for the company, emphasizing the importance of both the new battery plant and the projected $10 billion investment.
The investment will focus on expanding existing plants to strengthen the production system for high-demand vehicles such as hybrid electric vehicles and their key components. Although Toyota hasn’t disclosed specific sites or projects for the investment, it is expected to include many plant enhancements, aiming to broaden the range of vehicles produced locally.
Takanori Higashi, Toyota’s Chief Accounting Officer, declared the company’s commitment to promoting local production and procurement in all regions, increasing the local manufacturing ratio of complete vehicles and crucial components previously exported from Japan.
Toyota’s sales in the U.S. have been positive, with a sales volume of 2.07 million units from January to October this year, an 8% increase from the same period last year. Despite the Trump administration’s decision to eliminate tax credits for electric vehicles, the current market environment remains favorable for hybrid vehicles, where Toyota holds a market share of over 50%.
At a recent earnings presentation, Kenta Kon, Toyota’s CFO, noted the strong demand for hybrid vehicles and stated their intention to ramp up production to meet this demand. In April, Toyota announced an additional $88 million investment in their West Virginia plant to expand hybrid vehicle component production capabilities.
Despite increased sales, Toyota’s operating profit has been affected by higher costs due to tariff hikes, with a reported operating deficit of 134.1 billion yen in North America for the period of April to September, marking the first deficit since the 2008 financial crisis. Analysts suggest that expanding local production could potentially enhance profitability. However, Toyota has clarified that the investment decision is not directly related to tariff impacts.
The new battery plant, located on the outskirts of Greensboro, North Carolina, represents an investment of approximately $13.9 billion, the largest in Toyota’s history. Currently employing about 2,600 individuals, the plant aims to expand its workforce to 5,100 by 2034, with an annual production capacity target of 30 GWh upon full operation.