TOYOTA Motor is moving ahead with plans to manufacture and sell more electric vehicles (EVs) in the United States by investing US$1.4 billion at a plant in Indiana, the Japanese carmaker’s second such announcement this year.

The Princeton, Indiana, facility – which currently makes four gas and hybrid models – will add an unnamed all-electric, three-row SUV to its line-up, the company said on Thursday (Apr 25). It follows Toyota’s disclosure in February of plans to spend US$1.3 billion at a factory in Kentucky to make a separate three-row, fully electric SUV.

Both vehicles will use lithium-ion batteries supplied by a new plant being built by the automaker in North Carolina that is expected to start production in 2025.

Toyota has been slower than other major carmakers to embrace EVs, preferring to spread its bets by selling popular hybrid gas-electric powered models. The decision to manufacture EVs in the US is part of its efforts to keep compliant with toughening US emissions standards. Toyota also wants to stay competitive with rivals’ EVs that benefit from US government subsidies that favour local production.

The automaker currently sells two EVs in the US, the bZ4X and Lexus RZ 450e, and both are manufactured in Japan. While sales of hybrids made up about 29 per cent of Toyota’s US sales last year, deliveries of its EVs have been tepid amid a global slowdown in demand. The automaker did not help itself by stumbling with the bZ4X rollout: The vehicle was temporarily pulled from the market after its launch in 2022 due to a defect that could cause its wheels to fall off. BLOOMBERG