Toyota Motor Corporation said last week it will invest up to $10 billion in the United States over the next five years, as the Japanese automaker ramps up battery production for hybrid and electric vehicles.
The announcement was made as Toyota, the world’s largest automaker by volume, opened its first overseas plant dedicated to battery production in North Carolina. It aims to bring its cumulative investment total in the United States, a key market, to $60 billion.
Toyota’s commitment
Tetsuo Ogawa, president and chief executive officer of the Toyota unit in charge of North America, said the new factory and investment mark a historic milestone for the company and demonstrate its unwavering commitment to local communities, dealers, and suppliers. A Toyota Motor North America spokesperson declined to specify which projects the money would go to.
Toyota invested around $13.9 billion in the new North Carolina factory, which will produce lithium-ion batteries for hybrids, EVs, and plug-in hybrids. The automaker plans to employ up to 5,100 people there. It is Toyota’s 11th plant in the US and the automaker’s first battery manufacturing facility. It will house 14 production lines.
The move comes after Washington imposed a 15% tariff on Japanese car imports in September, down from the 27.5% initially set by President Donald Trump. The figure, however, remains six times higher than the 2.5 % rate that applied before April.
As Trump seeks to reduce the US trade deficit with Japan, an idea has emerged for Japanese automakers such as Toyota to import US-made vehicles into Japan.
At the Japan Mobility Show, Toyota said it plans to export its US-made vehicles to Japan and to open its distribution platform in Japan to US automakers, as a result of Japan’s commitment to accept for sale in Japan US-manufactured and US safety-certified vehicles without additional testing.
A ‘reasonable fuel efficiency standard’
At the event in North Carolina, US Secretary of Transport Sean Duffy applauded Toyota’s strategy, offering multiple powertrains rather than making a hard pivot toward fully electric vehicles.
“There’s sometimes political pressure to tell companies what they are supposed to do,” Duffy explained, “But Toyota didn’t listen to political pressure. They listen to consumer pressure.” How Duffy reckons that Trump’s tariff policy isn’t political pressure, he didn’t explain.
As automakers wrestle with their powertrain strategies in the US, Duffy promised that regulatory relief is on the way. “On the horizon, we’re going to have an announcement for a very reasonable fuel efficiency standard.”
“And when we do that, automakers are going to be able to make more cars, because they will be more cost-effective for the American consumer. We’re going to bring down the price of vehicles because we don’t have standards that, frankly, manufacturers can’t meet,” he added.
So, the US will clearly be softening its emission standards again to attract automotive investments and level its trade deficit. The environment is definitely no longer a priority.
