Toyota pledges to invest up to $13 billion in its US operations

TOKYO – Toyota Motor confirmed it will plough as much as US$10 billion (S$13 billion) into the US over the next five years to boost its local operations, less than a month after US President Donald Trump flagged the Japanese carmaker as planning such an investment.

The announcement clears up a confusing moment from Mr Trump’s visit to Tokyo in October, when he said Toyota would build plants all over the US “to the tune of over US$10 billion”.

At the time, the automaker would not confirm such a plan, calling it mere “speculation”. 

In a statement marking the start of production at its new battery plant in North Carolina on Nov 12, the automaker provided no further details, saying only it will spend the funds “to support future mobility efforts”. 

Toyota’s top executive in the US, Mr Ted Ogawa, said the battery plant and new investment mark “a pivotal moment in our company’s history”.

The investment announcement comes as the Trump administration pressures the global auto industry to shift more production to the US, and imposed punitive tariffs on many car parts and vehicles sourced from abroad.

The US President called out Toyota by name earlier in 2025 for importing too many vehicles from Japan to the US, and also singled it out during his first administration for building up manufacturing operations in Mexico.

In an attempt to blunt that earlier criticism, Toyota promised in 2017 to invest US$13 billion in US manufacturing. It said earlier in 2025 that it had spent those funds and that its total investment in the US currently exceeds US$50 billion – spread over nearly seven decades. 

The Japanese company imported about half of the vehicles it sold in the US in 2025, mostly from Canada and Mexico but also including some 281,000 vehicles made in Japan. 

The latest investment commitment was timed to coincide with the official opening of Toyota’s newest plant, a lithium-ion battery manufacturing facility located near Greensboro, North Carolina.

Construction of the factory in the rural town of Liberty cost US$13.9 billion and production is expected to slowly ramp up over the next decade. Toyota said it will create 5,100 new jobs and supply both hybrid petrol-electric and all-electric models.

When Toyota first announced the US battery plant project in 2021, it envisioned a steady rise in Americans’ demand for electric vehicles (EVs) due in part to then US president Joe Biden’s efforts to speed adoption of zero-emission vehicles with favourable policies.

Mr Trump’s return to the White House has led to a swift about-face in federal emissions regulations, including the abandonment of incentives for EV buyers such as a US$7,500 tax credit. 

Toyota has said 10 of the new battery facility’s 14 production lines will be dedicated to battery cells for fully electric vehicles such as an as-yet-unnamed all-electric sport utility vehicle to be built in Kentucky. The remaining lines – some of which are currently operational – have been earmarked to supply hybrid models such as the Camry mid-size sedan and hybrid versions of the Corolla Cross compact crossover and best-selling RAV4 compact SUV. 

Toyota has four lines currently producing batteries for hybrids, and expects some production for all-electric and plug-in hybrid model batteries to “be up by 2026”, spokeswoman Tiffannie Hedin said. It has said it aimed for all 14 lines to be operational by 2034, but that was before it scaled back ambitious plans to sell as many as seven EV models in the US. 

Demand for EVs is expected to soften, and BloombergNEF now forecasts a major surplus in US battery cell manufacturing capacity by 2030. That is largely due to a 14 million-unit downward revision in projected US sales of EVs by then. 

At full capacity, Toyota has said the battery-making facility will be capable of producing more than 30 gigawatt hours, or the equivalent of 800,000 hybrid, 150,000 plug-in hybrid and 300,000 all-electric vehicle batteries.

The carmaker delivered fewer than 30,000 all-electric vehicles in the US in 2024, even as its sales of hybrid petrol-electric vehicles have skyrocketed. BLOOMBERG