The Japanese car manufacturer is hedging their bets on solid-state batteries, and plans to invest $13.6 billion on the development and factory plants for next-generation electric car batteries.
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What is Happening?
- The world’s largest carmaker Toyota announced plans to spend USD$13.6 billion in electric car batteries and factory plants over the next decade in bid to sell more than two million electric vehicles per year by 2030.
- While the Japanese company has been winning the race in hybrid vehicles – which combine at least one electric motor with a gasoline engine to power the car – Toyota is eyeing to dominate the electric car market.
- Toyota is aiming to develop cheaper and longer-lasting electric vehicles with a partnership with Panasonic, and has said to be on track to develop next-generation solid-state batteries by 2025.
- A solid-state battery is a rechargeable energy storage system for electric vehicles. They tend to be lighter, have more energy density, offer more travel range, as well as recharge faster in comparison to lithium-ion batteries. However, Toyota is said to be concerned with the battery’s short lifespan.
- A plan for building a total of 70 manufacturing lines for EVs by 2030 is also currently underway.
- Other major car manufacturers have joined the race to expand their lines and transition to electric vehicles. German carmaker Volkswagen has recently invested $14bn for batteries with plans to build six battery factories across Europe by the end of the decade.
- In the US, President Biden signed an executive order in early August 2021 ordering 50% of all new American cars to be electric by 2030. This includes cars with electric batteries, plug-in hybrid electric and fuel cell electric vehicles.
- While the executive order is non-binding, many of the biggest automotive companies and manufacturers have made voluntary commitments aligned with Biden’s electrification goal, such as Ford, General Motors and Stellantis.
- At the time, Toyota failed to set any specific electric car sale goals but had said in an official statement that they will “do [their] part.” The Japanese carmaker’s new investment in batteries indicates that they are finally making progress in their transition to electric vehicles and reducing emissions from fossil fuel-powered cars.
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