Toyota has announced plans to invest another $1.3 billion in its Kentucky factory in the United States. According to Bloomberg, the Japanese legacy automaker aims to utilize the factory to produce an electric SUV and battery packs.
Investment plans
Toyota reportedly declared on Tuesday that the new investment will primarily fund its plans to produce its first US-made electric vehicle, including a three-row electric SUV and other yet-to-be-announced BEVs in its existing Kentucky factory.
In addition, Toyota’s allotted spending will also prepare the Kentucky factory to operate a battery pack production line. The company’s North Carolina plant will supply the Kentucky factory with the necessary battery cells.
The additional $1.3 billion raises Toyota’s total investment into the Kentucky factory to almost $10 billion since 1986, highlighting its intensified push for electrification.
“Today’s announcement reflects our commitment to vehicle electrification and further reinvesting in our US operations. Generations of our team members helped prepare for this opportunity, and we will continue leading the charge into the future by remaining true to who we are as a company and putting our people first for generations to come.”
Kerry Creech, Toyota Kentucky President
Toyota’s US presence
Toyota has stood by its conservative approach in its electrification strategy for years. It heavily focused on hybrid vehicles amid the transition of its competitors to battery-electric vehicles, pushing the industry to regard the company as a laggard.
As of today, it only has two available electric vehicles in the US market, including the bZ4X and Lexus RZ 450e. However, Toyota produces both models in Japan and exports them to the US. Therefore, they do not qualify for the US federal tax credits of up to $7,500.
Brief background
The Kentucky factory complex in Georgetown is Toyota’s oldest vehicle assembly factory in the US. It currently has approximately 9,400 workers.
Notably, it is a non-union factory, but it has been one of the few of its kind to face United Auto Workers’ protests in a renewed collective bargaining push.
Toyota’s announcement of an additional investment in US electric vehicle production transpired just hours following the full-year earnings guidance increase and strong profit gains in the fourth quarter of 2023.
Toyota has yet to announce more details about the upcoming electric SUV in the US market, including its exact pricing and launch date. It will apparently kick off production sometime in 2025, a crucial part of the brand’s plans to launch 10 new BEVs by 2026.
