Expect Toyota Motor Corp. to launch the production of its upcoming large and midsized electric sport-utility vehicles earlier than expected, with production starting in the middle of 2025.
The company plans to produce 10,000 units by the end of the year at its Georgetown, Kentucky plant, and sell 1 million electric vehicles by the year 2026, according to a Nikkei report.
Last December Toyota revealed plans to build a $1.29 billion battery “megasite” in North Carolina to produce batteries for EVs and hybrids in the U.S., enabling domestic production of all required EV parts from manufacturing to final assembly. Then, in August 2022, the company allocated an additional $2.5 billion — for a total of $3.8 billion — in the facility. The added investment brings two more lines to the site, allowing it to supply 1.2 million vehicles annually.
Also, it ensures that Toyota electric vehicle buyers qualify for the new electric vehicle tax credits under the Inflation Reduction Act.
A glimpse of things to come
The announcement comes in the waning weeks of 66-year-old CEO Akio Toyoda’s regime, one that will make way for 53-year-old Lexus chief Koji Sato to take over, a move that happens April 1. Toyoda has been unusually vocal in his belief that headlong rush to make sell only battery electric vehicles is misguided, saying that consumers and the marketplace should decide future eco-friendly powertrains.
But it seems that Sato is already changing the automaker’s strategy, one that will see Toyota adopt an “EV-first mind-set,” he said, reversing course from his EV-skeptical predecessor.
“It would make sense that he’s already putting his stamp on what’s going on,” said Sam Fiorani, Vice President, Global Vehicle Forecasting, AutoForecast Solutions LLC. “We are just the beginning of this curve, and there’s a long way to go.”
It’s not too late for Toyota
While Toyota builds 10 million vehicles annually, nearly all use internal combustion engines. And unlike General Motors, which is already building EVs on an EV-specific Ultium architecture, Toyota is just getting around to starting one. So far, the automaker converted a platform designed for ICE vehicles for use in its EVs. And while it may appear that Toyota is late to the party, such is not the case, Fiorani says.
“When you look at the world, we’re roughly 10% EV at the moment,” he said. “When you’re a manufacturer building 10 million vehicles a year like Toyota is, there’s a lot of money to be made on gas engines and plenty of time to get into the EV market.”
Looking at the current lineup of available EVs, Toyota may indeed have time to grab market share.
“Manufacturers who are already in the EV market don’t really know how deep it is yet,” he said. “They’re just measuring consumer acceptance beyond early adopters. We really haven’t gotten too many mainstream EVs out there.”
And that gives Toyota and Sato time to ready an assault.