ECONOMY

Toyota and Stellantis to build US battery plants

Toyota and Peugeot owner Stellantis have unveiled separate plans to build battery plants in the US as the world’s largest carmakers target tens of billions of dollars of investment over the next decade to electrify their fleets.

The Japanese carmaker on Monday said it would invest roughly $3.4bn through to 2030 to manufacture car batteries in the US, partly including $1.3bn to build its first US battery plant with its trading arm Toyota Tsusho that would create 1,750 jobs.

The spending is part of the $13.6bn it has set aside for battery development and supply over the next decade as the maker of the Prius hybrid addresses investor pressure to clarify its electric vehicle ambitions.

Separately, Stellantis said it had reached a preliminary deal for a joint venture with LG Energy Solution, the battery unit that was spun out of South Korea’s LG Chem, to build a new plant in the US to produce battery cells and modules for North America.

The group, which was formed by the merger of France’s PSA and Fiat Chrysler earlier this year, did not disclose the size of its investment but it is part of its €30bn spending programme over the next four years to develop electric vehicles. In July, the company said it planned to open five battery factories across Europe and the US by the end of the decade.

The new US plant is expected to start production by the first quarter of 2025 with annual production capacity of 40 gigawatt hours.

The rush to increase EV production comes as carmakers scramble to meet US president Joe Biden’s call for electric vehicles to account for half of all sales by 2030 in an attempt to curtail exhaust emissions.

In the US, battery-powered vehicles only comprise about 2 per cent of the market and Tesla dominates sales.

Ford also committed last month to spending $11bn alongside South Korea’s SK Innovation to build four plants in Kentucky and Tennessee to supply batteries and vehicles.

Toyota is spending much less than its rivals and taking a different strategy with its focus on developing batteries internally. The Japanese group has also argued that a longer-term fix for global warming should be a mix of hybrids, EVs and hydrogen-powered vehicles instead of a single bet on battery-powered cars.

But it has also acknowledged the need to step up its EV plans, saying it will launch 15 models by 2025. It also plans to sell 8m electrified vehicles by 2030, of which 2m will be battery-powered cars and fuel-cell vehicles.

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