Toyota ( TM Quick Quote TM - Free Report) , one of the world's leading automakers, is making significant strides in the electric vehicle (EV) market in the United States. Toyota's plans to introduce its first US-assembled electric SUV, coupled with the establishment of a state-of-the-art battery factory, position the company to compete effectively in the rapidly growing EV sector.
This article explores Toyota's recent announcements, the implications for the company, and its efforts to catch up with other EV manufacturers.
Expanding Electric Manufacturing in Kentucky
Toyota's Georgetown, Kentucky plant, already the company's largest manufacturing facility globally, will be the site for the assembly of its new three-row electric SUV starting in 2025. This move highlights Toyota's commitment to the U.S. market and marks a significant step in its e-mobility strategy. The plant's capacity to produce 550,000 vehicles annually will play a crucial role in Toyota's efforts to reduce carbon emissions in the United States.
Furthermore, Toyota's new battery factory in North Carolina will supply the batteries for the upcoming electric SUV. An additional investment of $2.1 billion brings the total investment in the battery factory to nearly $6 billion. With six production lines dedicated to lithium-ion batteries, including two for electric vehicles, the North Carolina facility will support Toyota's ambitious plans for electrification.
Investment Impact and Job Retention
Toyota's investment not only showcases its commitment to electric vehicle manufacturing but also its dedication to job retention. The company plans to retain 700 full-time jobs and nearly 9,000 total jobs at its Kentucky facility. This commitment, combined with the significant investment of $591 million in Scott County, demonstrates Toyota's recognition of Kentucky as a crucial hub in the electric vehicle sector.
Additionally, the battery factory in North Carolina will employ 2,100 workers and create a strong foundation for future expansion. Toyota's investment aims to meet its target of selling 1.8 million electric or hybrid vehicles in the United States by 2030. The strategic location of the battery factory near Toyota's existing US auto assembly plants further enhances the efficiency and competitiveness of its electric vehicle production.
Toyota's Electrification Strategy
Toyota's recent initiatives illustrate the company's commitment to catch up in the electric vehicle market. The bZ4X electric compact crossover, already available in select regions, and the upcoming three-row electric SUV demonstrate Toyota's dedication to expanding its electric vehicle lineup. In collaboration with Subaru and Chinese EV manufacturer BYD Co., Toyota is leveraging its partnerships to develop cutting-edge technology for its electric vehicles.
Moreover, Toyota aims to sell 2 million zero-emission hydrogen and battery electric vehicles worldwide annually by 2030. In the United States, the company targets sales of 1.5 million to 1.8 million electrified vehicles by 2030. This ambitious goal underscores Toyota's determination to transform its vehicle lineup and address the rising demand for environmentally friendly transportation options.
Toyota's recent investments in the United States signal a turning point in the company's electric vehicle strategy. By assembling its first US-made electric SUV in Kentucky and establishing a state-of-the-art battery factory in North Carolina, Toyota is demonstrating its commitment to meeting the growing demand for electric vehicles. With the global EV market expanding at a rapid pace, Toyota aims to secure a significant market share by introducing new models and leveraging partnerships. The company's investments in job retention and infrastructure lay a strong foundation for Toyota's electrification goals, positioning it as a formidable competitor in the evolving automotive landscape.
Zacks Rank & Key Picks
Toyota currently carries a Zacks Rank #3 (Hold).
A few top-ranked players in the same industry include
BMW AG ( BAMXF Quick Quote BAMXF - Free Report) , Stellantis ( STLA Quick Quote STLA - Free Report) and Li Auto ( LI Quick Quote LI - Free Report) . BMW: It is a Germany-based auto titan that designs, manufactures, and distributes luxury vehicles and motorcycles. BMW AG is taking great strides in electrification and expects EVs to account for 50% of its global sales by 2030. For 2023, the company plans to increase its BEV share to 15%.
The Zacks Consensus Estimate for BAMXF’s 2023 sales implies year-over-year growth of 9%. The consensus mark for 2023 EPS has moved north by 9 cents over the past 30 days. The stock sports a Zacks Rank #1 (Strong Buy) and a VGM Score of B. You can see
. the complete list of today’s Zacks #1 Rank stocks here Stellantis: This Italian-American carmaker is one of the notable names in the auto space. Stellantis’ Dare Forward 2030 strategy bodes well. The core objective of Dare Forward 2030 is to achieve 100% of total passenger car sales in Europe and 50% of light-duty truck and passenger car sales in the United States as battery electric vehicles by the end of the decade.
The Zacks Consensus Estimate for STLA’s 2023 sales implies year-over-year growth of 13.5%. The consensus mark for 2023 EPS has moved north by 27 cents over the past 60 days. The stock sports a Zacks Rank #1 and has a VGM Score of A.
Li Auto: It designs, develops, manufactures and sells new energy vehicles in China. The company provides Li ONE and Li L series smart electric vehicles. It also offers sales and after-sales management, and technology development and corporate management services, as well as purchases manufacturing equipment.
The Zacks Consensus Estimate for LI’s 2023 sales implies year-over-year growth of 131%. The consensus mark for the 2023 bottom line has improved from a loss of 8 cents per share to earnings of 25 cents/share over the past 30 days. The stock sports a Zacks Rank #1 and has a VGM Score of B.