Toyota is investing big money into electric vehicles, via battery production.
Toyota Motor has been focusing on building hybrid model cars, but it is now moving its focus to all-battery electric cars.
Today, Toyota announced it will be investing $5.3 billion in battery production in the U.S. and Japan.
That money should yield 40 gigawatt hours of annual battery production, enough to power 500,000 EVs.
The capacity is slated to come online between 2024 and 2026, according to Barron’s.
Why it’s news
Behind Tesla, Toyota is the most valued automaker in the world and is one of the largest producers of cars and trucks.
The company sells a large number of hybrid cars, which have both a regular gas engine and a battery pack in them, but they have not sold many all-electric vehicles yet. In 2021, Toyota sold about 2.6 million hybrids worldwide, but only 14,000 vehicles powered solely by batteries, Barron’s reports.
“This investment is aimed at enabling Toyota 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,” the Toyota news release says.
More than half of car buyers worldwide want an EV. The number of people wanting electric vehicles (EV) has hit a worldwide tipping point, so Toyota marketing to all types could be beneficial.
The latest EY Mobility Consumer Index shows that 52% of people looking to buy a car want to buy an EV. This is the first time the number has exceeded 50%, representing a rise of 11 percentage points since last year.
Backing up a bit
Recently, President Joe Biden signed a climate and healthcare law called the Inflation Reduction Act. The new bill includes a $369-billion investment in climate and energy policies.
The billions in climate and energy investment will boost renewable energy infrastructure in manufacturing, like solar panels and wind turbines, and include tax credits for electric vehicles and measures to make homes more energy efficient.
This new law only pertains to EVs made in the U.S., so with Toyota investing billions into its American battery operations some vehicles could be eligible for the tax credit.