Toyota is ramping up its commitment to electrification with plans to produce its first battery electric vehicle (BEV) in the U.S. and invest in additional battery plants.
The Japanese automaker announced on Tuesday that it would start producing a new BEV SUV at its Princeton, Indiana plant in 2023, alongside the hybrid version of the same model. The BEV SUV will be based on Toyota's e-TNGA platform, which is designed to accommodate various types of electric vehicles.
Toyota also said that it would invest $3.4 billion in its U.S. battery supply chain over the next decade, including building new battery plants and expanding existing ones. The company expects to create 1,750 new jobs and increase its annual battery capacity to 70 gigawatt-hours by 2030.
Toyota's President and CEO Ted Ogawa said that the company is "taking a comprehensive approach" to electrification, which includes developing and producing vehicles and ensuring a reliable and affordable supply of batteries.
"We are investing in our own battery supply chain here in the U.S. to meet the growing demand for electrified vehicles and to localize our operations further," Ogawa said. "We are committed to delivering exciting products that exceed our customers' expectations while contributing to a cleaner and more sustainable future for all."
Toyota's announcement comes as the auto industry is undergoing a major shift toward electrification, driven by stricter emissions regulations, consumer preferences, and technological advancements. According to a recent report by BloombergNEF, global sales of electric vehicles are expected to grow from 4.6 million in 2020 to 54 million in 2040, accounting for 58% of all passenger car sales.
Toyota has been a pioneer in hybrid technology, with its popular Prius model being the first mass-produced hybrid vehicle in the world. However, the company has been slower than some of its rivals to embrace fully electric vehicles, citing concerns about battery costs, range anxiety, and infrastructure availability.
The company has also been promoting hydrogen fuel cell vehicles (FCVs), such as its Toyota Mirai sedan, as another zero-emission option that offers longer range and faster refueling than BEVs. Toyota believes that both BEVs and FCVs have a role to play in achieving carbon neutrality, depending on the market conditions and customer needs.
However, Toyota has recently signaled a more aggressive push into BEVs as part of its goal to achieve carbon neutrality by 2050. The company plans to introduce 15 new BEV models globally by 2025, including seven under its new bZ (Beyond Zero) brand. The company also aims to have 40% of its global sales come from electrified vehicles by 2025 and 70% by 2030.
Toyota's move to produce BEVs in the U.S. also responds to the Biden administration's efforts to boost the domestic electric vehicle industry and reduce greenhouse gas emissions from transportation. President Biden signed an executive order to target having half of all new vehicles sold in the U.S. be electric by 2030.
The administration has also proposed a $174 billion plan to support the electric vehicle sector, including incentives for consumers, manufacturers, and suppliers and funding for charging infrastructure and research and development.
Toyota said it supports the administration's vision of a cleaner and more efficient transportation system and will work with federal, state, and local governments to advance electrification in the U.S.
"We appreciate the Biden administration's leadership on reducing greenhouse gas emissions and creating a more sustainable future," Ogawa said. "We look forward to collaborating with them and other stakeholders on policies and programs that will drive mass adoption of electrified vehicles and positively impact our society and environment."