According to a Toyota announcement on Monday, the auto giant plans to build a $1.3 billion electric vehicle battery plant near Greensboro, North Carolina, that will employ at least 1,750 people and contribute to the company’s growing goal of selling more electric vehicles this decade.
Governor Roy Cooper, as well as other elected and economic-development officials, gathered to officially break ground on the project, which will be built on hundreds of acres at the Greensboro-Randolph Megasite in Liberty, about 70 miles (113 kilometers) west of downtown Raleigh.
According to state and local officials and documents, Toyota will or could receive well over $430 million in cash incentives, tax breaks, and infrastructure upgrades from the state of North Carolina and local governments if it meets job creation and investment targets.
The plant, according to the Japanese automaker, will begin producing batteries in 2025.
The announcement represents a significant step forward for the Greensboro region’s economy, which is still searching for new jobs after the region’s generations-old textile industry went out of business in the 1990s and 2000s.
Local officials had been attempting to bring a large corporation to the area for several years before finally succeeding. Approximately four years ago, North Carolina was unsuccessful in its bid to build a joint Toyota-Mazda automobile manufacturing plant in Alabama.
At the announcement at the proposed site, Cooper said, “Good things come to those who wait.” He added that the production will help North Carolina achieve its goal of becoming a leader in clean energy. Eventually, we hope that everything associated with the battery will be included in this as well.
Toyota intends to invest a total of $3.4 billion in automotive batteries in the United States over the next ten years, with the plant representing a portion of that total. It did not specify how the remaining $2.1 billion would be spent, but it is likely that a portion of it will be used to build another battery factory.
Toyota will partner with Toyota Tsusho, a subsidiary that currently manufactures a variety of parts for the automaker, to form a new company to manage the new plant. Toyota stated that the company will also assist the company in expanding its supply chain in the United States and increasing its knowledge of lithium-ion auto batteries.
The site near Greensboro is in close proximity to many of Toyota’s existing auto assembly plants in the United States, including those in Missouri, Kentucky, Indiana, Alabama, and Texas. The location where the company will manufacture fully electric vehicles for sale in the United States has not yet been announced.
According to a news release, “North Carolina provides the right conditions for this investment, including infrastructure, a high-quality education system, access to a diverse and skilled workforce, and a welcoming environment for doing business.” Toyota Motor North America CEO Ted Ogawa stated that the state provides “the right conditions for this investment.”
According to officials in charge of economic development, the jobs, which are expected to be created by 2029, will have average salaries of more than $62,000 per year.
If Toyota agrees to a second phase of the project, in which it would invest $3 billion and create more than 3,800 jobs in total, the company could receive hundreds of millions of dollars in additional tax breaks and subsidies.
Toyota Motor Corporation expects to sell 2 million zero-emission hydrogen and battery electric vehicles per year worldwide by 2030, according to the company. In the United States, the company expects to sell 1.5 million to 1.8 million vehicles that are at least partially electrified by 2030, according to the company.
Toyota currently offers hydrogen vehicles, hybrid vehicles, and plug-in hybrid powertrains in the United States, but no vehicles that are solely powered by batteries. Consequently, environmental organizations have accused the company of being too slow to adopt the technology. Toyota claims that by 2025, it will have 15 battery-electric vehicles available for purchase around the world.
Toyota claims that vehicles that operate at least partially on electricity currently account for about a quarter of its sales in the United States, with the company expecting that figure to rise to nearly 70% by 2030.
It comes as automakers race to build battery factories in North America to meet the expected exponentially increasing demand for electric vehicles as the world transitions away from internal combustion engines, according to the announcement.
Stellantis, formerly known as Fiat Chrysler, has announced that it will build two battery plants in North America in the near future. Ford has announced the construction of three battery cell factories in Kentucky and Tennessee, while General Motors has announced the construction of four battery cell factories. Two of those locations, in Ohio and Tennessee, have been announced so far, but more are expected.
According to the LMC Automotive consulting firm, new fully electric vehicle sales in the United States will reach nearly 400,000 this year, nearly doubling the figure from the previous year. However, they only account for approximately 2.6 percent of total sales. However, the company anticipates that sales will increase to more than 730,000 next year and more than 2 million by 2025. Even if EV sales reached 2 million, they would account for only about 12 percent of total new vehicle sales in the United States.
Earlier this year, President Joe Biden received a commitment from the auto industry to produce electric vehicles for as much as half of new vehicle sales in the United States by 2030, according to the White House.