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Toyota (TM) in the Fast Lane: Japan Fuels EV Battery Drive
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In a significant move to accelerate the transition to green mobility, Japan’s government has pledged to provide Toyota (TM - Free Report) with up to $841 million in subsidies. The funds will bolster the automaker's investment in the domestic production of electric vehicle (EV) batteries, the lifeblood of the future of mobility.
This week, Toyota revealed an extensive plan outlining new technology deployment and radical factory redesigns, clearly indicating the company's resolve to secure a larger slice of the rapidly expanding battery EV market. Despite being a prominent name in the automobile industry, Toyota has trailed behind rivals like Tesla in the EV race. The support from Japan’s government is expected to help bridge this gap and amplify Toyota's position in the global EV scene.
Industry Minister Yasutoshi Nishimura emphasized the intensifying global competition for storage batteries and capital investment. He expressed hopes that large-scale investments by Toyota and other groups would significantly fortify Japan's supply chain for storage batteries, crucial for the nation's economic security and technological prowess.
The investment is part of a broader plan under an economic security law, where batteries for energy storage, including car batteries, are considered critical. An allocation of 331.6 billion yen has been set aside in the country's second supplementary budget to foster the supply and development of these batteries.
Of the total investment, Japan’s government will cover just over a third, approximately 117.8 billion yen ($841 million), including the development of next-generation solid-state batteries and lithium iron phosphate batteries. The subsidy will be disbursed not just to Toyota but also to three other companies collaborating with it on battery development, including Toyota Industries.
The government anticipates mass production of the batteries to commence in stages from October 2026 onward. This investment is projected to ramp up annual production capacity in Japan to 45 gigawatt hours (GWh). Furthermore, the government has set an ambitious target to achieve a domestic output capacity of 150 GWh by 2030.
This strategic collaboration between the government of Japan and Toyota is a testament to the potential of public-private partnerships in driving forward the green energy transition. The move not only underscores Japan's commitment to a more sustainable future but also positions Toyota as a strong contender in the global EV race. For investors, this opens up opportunities to participate in the growth of the EV market, which is poised for explosive growth in the coming decade.
While the journey to a fully electric future is filled with challenges and uncertainties, the direction is clear, and the momentum is unstoppable. It is expected that this investment will not only fuel Toyota's ambition to lead the EV market but also catalyze a more sustainable, green future for the global automobile industry.
Ford (F - Free Report) : It is one of the leading automakers in the nation. A strong vehicle mix supported by F-series trucks and SUV models, combined with a robust EV lineup, should drive Ford’s growth.
Ford currently sports a Zacks Rank #1 and has a Value Score of A. The Zacks Consensus Estimate for F’s 2023 sales implies year-over-year growth of 7.5%. The consensus mark for the firm’s 2023 and 2024 EPS has moved north by 9 cents and 5 cents, respectively, over the past 30 days.
General Motors (GM - Free Report) : One of the world’s largest automakers, General Motors held the largest share of the U.S. auto market at 16% in 2022. The company’s compelling portfolio witnesses strong demand for quality full-size pickups and SUVs.
GM currently sports a Zacks Rank #1 and has a Value Score of A. The Zacks Consensus Estimate for General Motors’ 2023 sales implies year-over-year growth of 4.5%. The consensus mark for the firm’s 2023 and 2024 EPS has moved north by 54 cents and 52 cents, respectively, over the past 60 days.
Stellantis (STLA - Free Report) : This Italian-American carmaker is also 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 EVs by the end of the decade.
The Zacks Consensus Estimate for STLA’s 2023 sales implies year-over-year growth of 13.4%. The consensus mark for 2023 and 2024 EPS has moved north by 27 cents and 49 cents, respectively, over the past 60 days. The stock sports a Zacks Rank #1 and has a Value Score of A.
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Toyota (TM) in the Fast Lane: Japan Fuels EV Battery Drive
In a significant move to accelerate the transition to green mobility, Japan’s government has pledged to provide Toyota (TM - Free Report) with up to $841 million in subsidies. The funds will bolster the automaker's investment in the domestic production of electric vehicle (EV) batteries, the lifeblood of the future of mobility.
This week, Toyota revealed an extensive plan outlining new technology deployment and radical factory redesigns, clearly indicating the company's resolve to secure a larger slice of the rapidly expanding battery EV market. Despite being a prominent name in the automobile industry, Toyota has trailed behind rivals like Tesla in the EV race. The support from Japan’s government is expected to help bridge this gap and amplify Toyota's position in the global EV scene.
Industry Minister Yasutoshi Nishimura emphasized the intensifying global competition for storage batteries and capital investment. He expressed hopes that large-scale investments by Toyota and other groups would significantly fortify Japan's supply chain for storage batteries, crucial for the nation's economic security and technological prowess.
The investment is part of a broader plan under an economic security law, where batteries for energy storage, including car batteries, are considered critical. An allocation of 331.6 billion yen has been set aside in the country's second supplementary budget to foster the supply and development of these batteries.
Of the total investment, Japan’s government will cover just over a third, approximately 117.8 billion yen ($841 million), including the development of next-generation solid-state batteries and lithium iron phosphate batteries. The subsidy will be disbursed not just to Toyota but also to three other companies collaborating with it on battery development, including Toyota Industries.
The government anticipates mass production of the batteries to commence in stages from October 2026 onward. This investment is projected to ramp up annual production capacity in Japan to 45 gigawatt hours (GWh). Furthermore, the government has set an ambitious target to achieve a domestic output capacity of 150 GWh by 2030.
This strategic collaboration between the government of Japan and Toyota is a testament to the potential of public-private partnerships in driving forward the green energy transition. The move not only underscores Japan's commitment to a more sustainable future but also positions Toyota as a strong contender in the global EV race. For investors, this opens up opportunities to participate in the growth of the EV market, which is poised for explosive growth in the coming decade.
While the journey to a fully electric future is filled with challenges and uncertainties, the direction is clear, and the momentum is unstoppable. It is expected that this investment will not only fuel Toyota's ambition to lead the EV market but also catalyze a more sustainable, green future for the global automobile industry.
TM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3 Top-Ranked Players From the Auto Space
Ford (F - Free Report) : It is one of the leading automakers in the nation. A strong vehicle mix supported by F-series trucks and SUV models, combined with a robust EV lineup, should drive Ford’s growth.
Ford currently sports a Zacks Rank #1 and has a Value Score of A. The Zacks Consensus Estimate for F’s 2023 sales implies year-over-year growth of 7.5%. The consensus mark for the firm’s 2023 and 2024 EPS has moved north by 9 cents and 5 cents, respectively, over the past 30 days.
General Motors (GM - Free Report) : One of the world’s largest automakers, General Motors held the largest share of the U.S. auto market at 16% in 2022. The company’s compelling portfolio witnesses strong demand for quality full-size pickups and SUVs.
GM currently sports a Zacks Rank #1 and has a Value Score of A. The Zacks Consensus Estimate for General Motors’ 2023 sales implies year-over-year growth of 4.5%. The consensus mark for the firm’s 2023 and 2024 EPS has moved north by 54 cents and 52 cents, respectively, over the past 60 days.
Stellantis (STLA - Free Report) : This Italian-American carmaker is also 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 EVs by the end of the decade.
The Zacks Consensus Estimate for STLA’s 2023 sales implies year-over-year growth of 13.4%. The consensus mark for 2023 and 2024 EPS has moved north by 27 cents and 49 cents, respectively, over the past 60 days. The stock sports a Zacks Rank #1 and has a Value Score of A.