EV investment burdened by Chinese competition… Toyota postpones construction of new battery plant
Toyota has been actively adjusting its electric vehicle (EV) strategy in response to increasing competition from Chinese manufacturers. In July 2024, the company announced plans to construct a new EV battery plant on Japan's Kyushu island, aiming to strengthen its EV supply chain and compete with emerging Chinese EV makers like BYD. Additionally, in February 2025, Toyota revealed intentions to establish a wholly-owned subsidiary in Shanghai's Jinshan district for the development and production of battery electric vehicles (BEVs) and batteries, with production slated to begin in 2027.
However, recent developments indicate that Toyota is reassessing its investment strategies due to the competitive pressure from Chinese EV manufacturers. The company has decided to postpone the construction of the Kyushu battery plant, reflecting concerns over the rapidly evolving market dynamics and the need to optimize investment amid intensifying competition. This decision underscores the challenges traditional automakers face as they navigate the transition to electrification in a market increasingly dominated by agile and cost-competitive Chinese firms.
To bolster domestic battery production, the Japanese government has pledged up to $2.4 billion in support for projects by companies like Toyota and Nissan, aiming to increase Japan's annual battery production capacity by 50% to 120 GWh. Despite these efforts, Toyota's postponement of the new battery plant highlights the complexities and uncertainties in the global EV market, particularly concerning competition from Chinese manufacturers.
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