Detroit, Oct. 19 (U.S.): Global automakers and tech companies are accelerating their pace when it comes to building factories and preparing for what many believe will be a rapid transition from internal combustion engines to electric vehicles.
On Monday, Toyota, Stellantis, Foxconn, Ford and Volvo each made announcements about electric vehicle components or assembly plants, or planned to raise capital to fund the transition. These moves come on top of previous plans by Ford and General Motors to build five US battery factories in anticipation of the transition to electric power.
These moves are ahead of demand at the moment, but forecasters expect the share of electric vehicles will rise dramatically as more battery electric models are introduced as governments increase requirements for zero-emission vehicles to combat climate change.
Currently, only about 4.8% of about 80 million new cars sold globally run solely on electric, LMC Automotive, the Associated Press (AP) reports.
But consulting firm Alex Partners expects that figure to rise to 11% in 2025 and 24% in 2030. If gas-electric hybrids, which can travel short distances with only electricity, were included, that figure would rise to 28% in 10 Years.
At the same time, Alix Partners predicts that global sales of gas and diesel cars will drop from the current 89% to about 39% by 2030. Gas-electric hybrids, which run on both gasoline and electricity, will rise from 7% Currently to 33% in 2030.
“We’re all trying to get a solution for how customers accept electric vehicles,” Chris Reynolds, managing director of Toyota North America, said in an interview with The Associated Press. “We don’t know for sure, but we have to be prepared.”
Toyota said it plans to build a new $1.29 billion plant in the United States to manufacture batteries for hybrid and all-electric cars. The location has not been announced, but the company said it will eventually employ 1,750 people and start making batteries in 2025, gradually expanding through 2031.
The plant is part of the $3.4 billion Toyota plans to spend in the United States on car batteries over the next decade. He didn’t detail where the remaining $2.1 billion would be spent, but part of that would likely go to another battery plant.
Stellantis, formerly Fiat Chrysler and LG Energy Solution, said Monday that they plan to build a battery manufacturing facility to help the automaker get 40% of its US sales from cars that are at least partially electric by 2030. They didn’t say where the plant would be.
Also on Monday, the Taiwanese company that makes smartphones for Apple and others, Foxconn Technology Group, said it would produce electric cars and buses for car brands in China, North America, Europe and other markets.
Volvo Cars on Monday unveiled more details of its initial public offering that will fund its ambitious plan to turn into a fully electric car company by 2030. The Swedish car brand, owned by Chinese automaker Geely, said the IPO would value the company at 163 – 200 billion kronor ($18.8 – 23 billion) when shares begin trading on October 28.
Ford Motor Company has announced that it will convert a transmission plant in northwest England into a plant that produces electric power units for cars and trucks sold across Europe.
Most of the ads lacked specific details like locations, and some didn’t say how many jobs would be created.
Jeff Schuster, head of global vehicle forecasting for LMC Automotive, said that’s because it’s “popular” for automakers to make such announcements, which have been well received by investors. But he said factories would be necessary, especially in the United States, where battery manufacturing capacity was lagging in Europe and China.
“Behind the scenes, this has been evolving as we look to transition to electric vehicle technology globally,” he said. “That’s basically it. You need the batteries before you can get there.”
The moves come after Ford and General Motors recently announced major investments in US battery plants. General Motors plans to build battery plants in Ohio and Tennessee, while Ford plans to build plants in Tennessee and Kentucky.
Toyota will form a new company to run its new battery plant in the United States with Toyota Tsusho, a subsidiary that now makes a range of parts for the automaker. Toyota said Monday that the company will also help Toyota expand the US supply chain, as well as increase its knowledge of lithium-ion batteries for cars.
The new plant will likely be near one of the company’s US assembly plants in Missouri, Kentucky, Indiana, Alabama or Texas.
Toyota plans to sell 2 million non-hydrogen and battery-electric vehicles worldwide annually by 2030. In the United States, Toyota plans to sell 1.5 million to 1.8 million vehicles by 2030 in the United States that are at least partially electric.
Reynolds said no one can predict exactly how quickly the switch to battery power will happen, but he said the transition to gas-electric hybrids happened faster than Toyota expected when it introduced the Prius in the late 1990s. He sees plug-in hybrid cars as a bridge between full internal combustion engines and battery electric vehicles.
Now in the United States, Toyota offers hydrogen vehicles, hybrids, and hybrid engines. Toyota says that at least partially electric vehicles now account for about a quarter of its sales in the US, and it plans to increase that to nearly 70% by 2030.
The company says it will put 15 battery electric cars on sale globally by 2025.
RAE