ALEXANDRIA, Va.—Toyota is investing up to 730 billion yen ($5.6 billion) on electric-vehicle batteries in Japan and the United States, reports the Associated Press. The automaker is designating 400 billion yen ($3 billion) to the Himeji Plant of Prime Planet Energy & Solutions Co. in Japan, and $2.5 billion (about 325 billion yen) will go to Toyota Battery Manufacturing, a plant that is being built in North Carolina and is set to begin production in 2025.
Toyota has recently expressed doubts about the transition to electric vehicles, reports the Wall Street Journal. The company reiterated its stance saying that it “believes that there is more than one option for achieving carbon neutrality,” in a statement.
“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,” the company said in the statement.
The company has been known to take a more cautionary stance on the world’s move to EVs, with executives questioning how quickly the transition will happen due to the industry’s shortage of minerals and materials that go into making EV batteries. The Journal reports that Toyota believes hybrid vehicles are a better solution for regions that lack sufficient EV infrastructure and rely on fossil fuels to create electricity.
“As much as you want to talk about EVs, the marketplace isn’t mature enough,” Jack Hollis, executive vice president of sales at Toyota Motor North America, told journalists, according to a recent article in the Journal.
Hollis believes that the high cost of EVs and lack of an EV charging infrastructure will deter consumers from widely adopting EVs. In addition, the increasing cost of EV batteries for vehicle manufacturers will likely inflate the cost of a battery-powered vehicle.
“I don’t think the market is ready for what the rhetoric is saying,” Hollis said.
However, Toyota is still investing billions in EVs and their components, and Hollis said that is because Toyota wants to be prepared for when the world does eventually adopt electric vehicles.
In its most recent quarter, Toyota shipped around 4,000 EVs, less than 1% of its total unit sales, while hybrid models made up 30% of Toyota and Lexus shipments for the quarter.
Other vehicle manufacturers, including Ford, General Motors, Hyundai-Kia, Stellantis and VinFast, have announced plans for battery manufacturing in the U.S. Earlier this week, Honda said it plans to invest $4.4 billion in building an EV battery plant in the U.S. in partnership with South Korea’s LG Energy Solution. Tesla Inc. supplier Panasonic announced a similar-sized investment in Kansas and is considering an additional one in Oklahoma, the Journal reports.
The Inflation Reduction Act offers qualified consumers a tax credit of up to $7,500 on the purchase of an electric vehicle. To get the full amount, the EV must contain a battery made in North America, and 40% of the materials in the battery must also be from the continent.
Here’s what the Inflation Reduction Act means for c-stores.