Toyota will spend a further $2.1 billion to construct a brand new battery plant in North Carolina, the most recent signal that the automaker is trying to meet up with an trade that has embraced the transfer to electrical automobiles.

The Japanese automaker additionally introduced Wednesday it should construct its first U.S.-made electrical SUV at its Kentucky manufacturing facility, ranging from 2025. The three-row automotive will use batteries provided by Toyota’s North Carolina manufacturing facility.

On the outset, the information means that Toyota is strengthening its dedication to EVs. Traditionally, the corporate has lagged behind different automakers in asserting new EV fashions, as an alternative supporting hydrogen-based automobiles. However earlier this 12 months, Toyota mentioned it plans to introduce 10 new battery-powered automobiles, with a goal of 1.5 million EVs offered per 12 months by 2026.

The battery plant in North Carolina is a part of the corporate’s renewed pledge towards electrification — albeit it’s not one dedicated to solely all-electric automobiles. Of the six manufacturing strains slated to go dwell when manufacturing begins in 2025, solely two shall be devoted to all-electric EVs. The opposite 4 shall be for hybrid EVs.

Toyota hasn’t but shared the anticipated gigawatt-hour capability of its plant. Prior to now, the corporate has mentioned it might produce sufficient batteries for 1.2 million automobiles per 12 months.

The elevated capital spend right into a U.S. battery manufacturing facility indicators that the federal government’s incentives to spice up battery manufacturing nationally is working. The Inflation Discount Act, signed into legislation in August 2022, consists of incentives to provide batteries within the U.S. The outcome has been a slew of commitments from automakers home and worldwide — from Ford and Common Motors to BMW and Hyundai — to get manufacturing up and working on U.S. soil within the subsequent few years.

Toyota initially introduced its dedication to constructing a U.S.-based manufacturing facility in 2021. On the time, the Japanese automaker earmarked $1.3 billion for a manufacturing facility close to Greensboro. Final September, Toyota tripled that funding to $3.8 billion. The newest capital injection brings Toyota’s complete dedication to $5.9 billion.