Toyota Motor is set to begin electric vehicle production in the U.S. state of Kentucky by 2025, Nikkei reported on Tuesday. The company plans to update an existing factory to make electric models alongside gasoline-fueled autos.
With the new factory, Toyota aims to capture the growing demand for clean-energy cars and benefit from new government incentives in the U.S. market, which accounts for one-fifth of its global sales. Under the Inflation Reduction Act passed last year, tax credits of up to $7,500 are offered for purchases of new electric vehicles assembled in North America.
Together with a battery plant set to open in North Carolina by around 2025, the Kentucky factory will enable Toyota to make electric vehicles entirely in the U.S., from key components to final assembly. Toyota aims to manufacture around 200,000 electric vehicles in the U.S. annually from 2026 onward, accounting for nearly 20% of its output there, along with production in Japan, China, and India. The company plans to supply 1 million EVs worldwide per year by that time.
Incoming President Koji Sato has indicated that pivoting to electrics is a priority for Toyota. Despite being the world's largest automaker, Toyota produced only 24,000 EVs worldwide under its own and the Lexus brands in 2022, compared with the 1.31 million units sold by Tesla. However, plans call for increasing global EV sales to 3.5 million units a year by 2030.
According to British market research firm LMC Automotive, global EV sales are expected to reach 36.71 million vehicles in 2030, roughly quintupling from 2022 and accounting for 35% of the new-car market.
Source: Nikkei
