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Toyota (TM) to Invest in Indiana, Revs Up Electrification Goals

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Per Bloomberg, Toyota Motor (TM - Free Report) recently announced the decision to invest $803 million to revamp its factory in Indiana to manufacture the electrified version of two new sport-utility vehicles (SUVs), one of which will be sold by its luxury Lexus brand.

The investment is expected to create 1,400 new jobs at the company’s plant in Princeton, Indiana. The Japanese automaker failed to reveal the name of the models that will be manufactured at the plant, but confirmed that these will be three-row SUVs and one of the SUV will be a Lexus model.

Details of how the SUV will be powered are still under the wraps, but the company did confirm that the vehicles would be "electrified." This means these could be pure battery-electric vehicle or a plug-in hybrid model.

Reportedly, both new vehicles will also be equipped with a “semi-automated driving system” that allows for hands-free driving under certain circumstances. The vehicles will also have remote parking feature which allows the driver to park the vehicle, while outside the vehicle using a smartphone.

Amid the heightening climate-change concerns and government regulations on carbon emissions, investors are intrigued by automakers that provide green transportation solutions. A shift toward electric future has made it necessary for industry players to reorient their business model and accelerate the EV game. Amid the transforming auto industry, automakers are taking considerable strides to provide transportation with zero emissions.

Toyota has been the king of hybrid vehicles since the introduction of the Prius. It has also been investing in fuel-cell vehicles like the Mirai, and sells the UX300e in Europe and China. However, the auto giant has been relatively slower in the adoption of EVs into its line-up and has received heavy criticism for the same.  

Nonetheless, Toyota is finally ready to tap the EV frenzy with its recent launches. The Japanese auto giant recently announced the launch of Toyota bZ, its newly-established series of battery electric vehicles (BEVs). It also unveiled a concept version of the Toyota bZ4X at the Auto Shanghai motor show, which will be the first model in the bZ series.

In fact, the two new SUVs to be developed at Indiana will help enhance the company’s electrified product portfolio and bring it closer to its commitment of achieving carbon neutrality by 2050. The automaker has also pledged to have 70 electrified models hit the road by 2025, including 15 battery electric vehicles (BEVs).

Toyota, peers of which include Honda Motor (HMC - Free Report) , Daimler AG (DDAIF - Free Report) and Geely Automobile Holdings (GELYY - Free Report) , currently carries a Zacks Rank of 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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