Toyota Motor Corp. said Wednesday it will spend up to 730 billion yen ($5.6 billion) to raise auto battery output in Japan and the United States to boost its global capacity more than seven-fold as it focuses more on battery-powered electric vehicles.
Toyota will ramp up its annual battery production capacity to up to 46 gigawatt-hours worldwide from the current 6 gigawatt-hours, which includes batteries for hybrid vehicles, by adding capacity in the two key markets.
The increased capacity will be the equivalent of battery packs for 560,000 of Toyota's bZ4X electric crossover sport-utility vehicle that was recently launched.
The outlay of 730 billion yen is part of the 4 trillion yen that Toyota plans to spend to help meet a goal of selling 3.5 million EVs worldwide and raising battery output capacity to 280 gigawatt-hours by 2030.
Of the 730 billion yen, Toyota will spend about 400 billion yen to increase output capacity at Prime Planet Energy & Solutions Co. and other domestic plants and about 325 billion yen at a new battery plant in North Carolina, slated to begin production between 2024 and 2026.
Prime Planet Energy & Solutions is a joint battery production venture set up by Toyota and Panasonic Corp.
Toyota has led the global electrified vehicle market with its hybrid models but is viewed as being less aggressive in introducing fully battery-powered vehicles.
The world's biggest carmaker by volume is pursuing a "full lineup" strategy, which covers a broader range of electrified vehicles, including EVs and hybrids, as well as fuel cell vehicles that run on hydrogen.
But the company has been shifting more to battery EVs in recent years with loftier sales and product lineup plans outlined late last year.
Toyota now aims to roll out 30 new EV models worldwide by 2030 to hit the 3.5 million EV sales target, roughly 30 percent of the company's global sales of about 10.5 million vehicles last year.
The latest battery production projects follow an investment plan revealed Monday by its local peer Honda Motor Co. that it and LG Energy Solution Ltd. will spend $4.4 billion and set up a joint venture in the United States to produce EV batteries.
A growing list of countries and regions are calling on automakers to discontinue conventional gasoline-powered vehicles.
The state of California plans to ban sales of gasoline-powered vehicles, including hybrid cars, by 2035, a move that could spread to the rest of the United States and prompt an EV development race among automakers.
The European Union and China have also set similar goals amid growing international efforts to reduce carbon emissions.