Toyota will build its first U.S.-assembled electric SUV in Kentucky and invest an additional $2.1 billion in a North Carolina plant being built to produce the lithium-ion batteries powering the vehicles.
The new three-row SUV is an important step in the Japanese automaker’s acceleration of efforts to electrify its fleet of cars and trucks and build them where they’re sold.
“We are committed to reducing carbon emissions as much as possible and as soon as possible,” Toyota’s Plano, Texas-based North America CEO Ted Ogawa said Wednesday in a statement. “It is exciting to see our largest U.S. plant, Toyota Kentucky, and our newest plant, Toyota North Carolina, drive us into the future together with BEV and battery production for our expanding electrified lineup.”
In a conference call Wednesday morning, Toyota executives in Kentucky and North Carolina kept their comments to the company’s production footprint and declined to provide additional details about the vehicle itself, including name, pricing and whether U.S. assembly will qualify the SUV for the Inflation Reduction Act’s $7,500 tax credit for buyers.
Toyota’s additional $2.1 billion brings the company’s North Carolina investment to just under $6 billion. The battery plant under construction in Liberty is expected to begin production in 2025.
Toyota’s announcement signals that the 9 million square foot plant in Georgetown, Ky., will lead its carbon reduction efforts in the U.S. The plant’s nearly 9,500 workers now build the Camry, Camry hybrid and RAV4 hybrid models as well as engines and other components.
“Toyota Kentucky set the standard for Toyota vehicle manufacturing in the U.S. and now we’re leading the charge with BEVs,” said Susan Elkington, president of Toyota Motor Manufacturing in Kentucky.
The Kentucky plant, Toyota’s oldest production line in North America, produced 445,136 vehicles last year and just under 600,000 engines. It’s also home to Toyota’s production engineering U.S. headquarters.
The North Carolina facility will be Toyota’s hub for developing and producing lithium-ion batteries on six production lines – four for hybrid electric vehicles and two for battery EVs. It plans to employ 2,100 workers at the plant.
In early May, Toyota executives in Tokyo ramped up the company’s EV push and said they planned to add the equivalent of $7.4 billion in spending through 2030 to reach EV targets. The company’s aim is to sell 202,000 EVs in the fiscal year ending in March 2024 — a figure that’s five times higher than the previous year.
Toyota has been more cautious in its push into EVs than other industry players, opting for a “portfolio approach” that includes hybrid, plug-in hybrid, fuel cell electric and all-electric vehicles. It expects to sell more than 3.6 million hybrid vehicles globally this year, generating cash for future EV investment.
By 2025, the company plans to make electrified versions of every Toyota and Lexus model.
Asked if Wednesday’s announcements are a sign Toyota is trying to catch up to its competitors, Elkington and Toyota North Carolina President Sean Suggs reiterated the company’s commitment to its portfolio approach.
“I don’t say we’re behind. I just think it’s the right time,” Elkington said. “Battery electric vehicles are expensive and not everyone can afford them.”
In the last two years, Toyota has invested more than $8 billion in its U.S. manufacturing operations, including $461 million in 2021 to modernize the Kentucky plant with a flexible line for producing larger vehicles like the three-row electric SUV.
Toyota employs 39,000 people in the U.S.