Toyota announced Monday it would build a new, $1.29 billion battery manufacturing plant in Liberty, N.C., as part of a previously announced $3.4 billion investment in U.S. electric vehicle production.
Described as a “megasite” by Toyota, the plant will begin producing batteries in 2025 with four production lines expected to pump out enough lithium-ion batteries for 800,000 vehicles annually. Toyota intends to eventually expand production from four to six lines to support a total of 1.2 million vehicles a year.
The facility, named Toyota Battery Manufacturing, North Carolina, is anticipated to create 1,750 jobs. It’s Toyota’s first such factory. The company said the $1.29 million investment is projected to be made through 2031, indicating that additional production lines may not be immediately built out.
Toyota is forming a new company for its battery production with its subsidiary Toyota Tsusho, which makes parts for the automaker.
When the investment was announced in October, Texas was seen as a likely finalist for the new battery plant from Toyota. The state is already home to a number of Toyota facilities and offices, including its North American headquarters in Plano and a Toyota Tundra plant in San Antonio.
Toyota reportedly began focusing on North Carolina as the site for the plant in November, according to Bloomberg.
“North Carolina offers the right conditions for this investment, including the infrastructure, high-quality education system, access to a diverse and skilled workforce, and a welcoming environment for doing business,” Ted Ogawa, Toyota Motor North America CEO, said in a statement. “Today marks the beginning of a mutually beneficial partnership with the Tar Heel state as we embark on our journey to achieve carbon neutrality and provide mobility for all.”
Toyota said the factors that led it to choose North Carolina included strong government partnership at the state and local levels, a world-renowned education system, a diverse workforce, onsite rail transportation, four international airports and access to seaports, and a well-maintained highway system.
The company hasn’t indicated how it will spend the remainder of the previously announced investment, though Bloomberg reports it may go toward another battery plant. Outside Texas, further investment might land in close proximity to existing company operations in Alabama, Missouri, Kentucky and Indiana.
Elected officials and economic development professionals touted the Toyota deal as emblematic of the talented workforce located in North Carolina.
“We’re increasing our infrastructure, we’re bringing more electric buses online, we’re encouraging more EVs on the road and in our government fleet,” Gov. Roy Cooper said. “The world will look at North Carolina as a hub for clean energy and clean energy jobs.”
The Randolph County package would result in an estimated $65 million in property tax rebates and the transfer of megasite land to the company, should it invest $1 billion and create at least 1,750 jobs with average salaries of more than $62,000, according to a Randolph economic development official. The return to the company would grow if a second phase of the project occurs — a $3 billion investment and more than 3,800 jobs in total.
An economic panel that must approve a separate state package of cash awards to companies seeking to build in North Carolina was to meet later Monday morning.
The North Carolina legislature has already promised to spend $135 million on road work and wetland improvements and would reimburse $185 million the company spends on similar upgrades if the second phase happens.
Toyota estimates its vehicle sales will be 70% EV and zero emission hydrogen vehicles by 2030, and it plans to sell nearly 2 million of the vehicles worldwide in that timeframe.
Currently in the U.S., Toyota offers hydrogen vehicles, hybrids and plug-in hybrid powertrains but no vehicles powered solely by batteries. That has drawn criticism from environmental groups that accuse the company of dragging its feet on the technology. Toyota said it will have 15 battery-powered vehicles for sale globally by 2025.
The announcement comes as automakers race to build North American battery factories to supply what is expected to be an exponentially increasing demand for electric vehicles as the world transitions away from internal combustion engines.
Stellantis, formerly Fiat Chrysler, has said it will build two battery plants in North America. Ford announced three plants in Kentucky and Tennessee, and General Motors has said it would build four battery cell factories. Only two of those locations have been announced, in Ohio and Tennessee.
The LMC Automotive consulting firm expects U.S. sales of new fully electric vehicles to hit nearly 400,000 this year, almost double last year’s figures. But they still make up only about 2.6% of sales. The firm expects sales to grow to more than 730,000 next year and more than 2 million by 2025. Even at 2 million, EV sales still would be only about 12% of U.S. new vehicle sales.
Earlier this year, President Joe Biden got a commitment from the auto industry to produce electric vehicles for as much as half of U.S. new vehicle sales by 2030.
The Associated Press contributed to this report.
