Toyota Motor Corp. announced that will build a new $1.3 billion battery plant in North Carolina to expand its ability to produce hybrid and electric vehicles.

The plant will produce lithium-ion batteries for as many as 800,000 vehicles per year. Production is expected to begin in 2025.
Chris Reynolds, chief administrative officer for Toyota Motor North America said the plant will "pave the way" for Toyota's U.S. production of electric vehicles.

Reuters reported that the investment will be made by a new company called Toyota Battery Manufacturing and is expected to create 1,750 new U.S. jobs.

In October, Toyota said it would establish a new company and build a new U.S. automotive battery plant with Toyota Tsusho, the automaker's metals trading arm and a unit of the Toyota Group. Toyota will hold a 90 percent stake in the battery company.

Demand for electric vehicles has sparked automakers around the world to invest billions of dollars into battery and electric vehicle production. The companies are facing increased demand to meet stringent environmental regulations.

In August, U.S. President Joe Biden signed an executive order setting a target to make half of all new vehicles sold in 2030 zero-emissions vehicles.

Biden’s 50 percent goal and the automakers’ 2030 goals includes battery electric, fuel cell and plug-in hybrid vehicles that also have a gasoline-engine.

North Carolina said the new plant will initially produce batteries for Toyota’s hybrid vehicles, and intends to produce batteries for EVs long term.
The state will reimburse Toyota for up to $79.1 million over 20 years and if Toyota expands the project to $3 billion it could receive up to an estimated $315 million.

The state approved additional support to help with final site preparations, including $135 million for road and other site improvements. If Toyota expands the project another $185 million in site development funds would become available.

Toyota said the North Carolina plant plans to eventually expand to at least six production lines for up to 1.2 million batteries annually.
The investment is part of Toyota's October announcement it would invest $3.4 billion on U.S. automotive battery development and production through 2030.

The funds are part of the $13.5 billion Toyota announced in September it planned to spend globally by 2030 to develop batteries.