It'll be part of a big investment in American manufacturing.
Toyota has been building hybrid vehicles since the launch of the first-gen Prius in 1997, but until now the automaker hasn’t built any of their powertrains in the United States. A new $373.8 million investment in five plants in the United States will change this by assembling electrified drivetrain components for the Highlander Hybrid.
"This investment is part of our long-term commitment to build more vehicles and components in the markets in which we sell them," said Jim Lentz, CEO of Toyota Motor North America, said about the plan.
The hybrid-focused upgrades will include building transmissions for electrified vehicles at the firm’s plant in Buffalo, West Virginia. The Bodine Aluminum factory in Jackson, Tennessee will be able to build more hybrid transmissions and housings. Some of these components will go into the Highlander Hybrid.
In terms of combustion engines, the investment will expand production capacity for building the company’s 2.5-liter engine in Georgetown, Kentucky. The automaker will also boost production of 2.5-liter cylinder heads and engine blocks at the Bodine Aluminum factory in Troy, Missouri.
In addition, the investment will allow Toyota’s factory in Alabama to build vehicles on the Toyota New Global Architecture (TGNA) platform. Plus, the plant will get an upgrade to build engines for TGNA vehicles.
Toyota will start on all of these projects this year, and the upgrades will be operational by 2020. The investment will also lead to 50 new jobs at the Alabama factory.
The big investment into hybrids comes as Toyota and Mazda also intend to spend $1.6 billion to build a new factory in the United States in 2021. The plant will employ 4,000 people and will have an annual production capacity of 300,000 vehicles. Mazda will make a yet-unnamed crossover there, and Toyota will use it for the next-gen Corolla.
Gallery: Toyota U.S. Hybrid Manufacturing
It's Electric: Toyota to Bring First Hybrid Powertrain Production to U.S.
$373.8 Million Investment in U.S. Plants Will Help Power Indiana-Built Highlander Hybrid
PLANO, TX (September 26, 2017)―Toyota just upped the stakes to remain the top manufacturer of hybrid vehicles worldwide with a $373.8 million investment in five U.S. manufacturing plants that will support production of its first American-made hybrid powertrain and to implement Toyota's New Global Architecture (TNGA) at its Alabama plant. Each of the projects is scheduled to begin this year and all should be operational by 2020.
The investments will include adding new production of hybrid transaxles (hybrid vehicle transmissions) at the Buffalo, WV, manufacturing facility; expanding 2.5-liter engine capacity at the Georgetown, KY, plant; increasing production of 2.5-liter cylinder heads at Bodine Aluminum's Troy, MO, plant; and modifying the Bodine Jackson plant to accommodate production of hybrid transaxle cases and housings and 2.5-liter engine blocks. The Huntsville, AL, plant will undergo a comprehensive upgrade to enable it to build engines that complement TNGA.
"This investment is part of our long-term commitment to build more vehicles and components in the markets in which we sell them," said Jim Lentz, CEO, Toyota Motor North America. "This strategy is designed to better serve our customers and dealers, and positions our manufacturing operations to fulfill their needs well into the future."
The 2.5-liter engines manufactured in Kentucky and transaxles made in West Virginia will be used in hybrid vehicles built in North America such as the Highlander Hybrid manufactured in Princeton, Indiana. Toyota remains the world leader in gas-electric hybrids, surpassing 3 million sales in the U.S. and 10 million globally.
Fifty new jobs will be created because of the investment at the Alabama plant. There will be no net gain of jobs at the Kentucky, West Virginia, or Bodine Aluminum facilities, but these investments will help to ensure the stability of the plants' employment levels in the future.
"This investment across five American plants expands capacity for our latest TNGA engines, and localizes production of hybrid powertrains, a core Toyota technology," said Jeff Moore, senior vice president for Manufacturing. "It underscores Toyota's confidence in the capability and global competitiveness of our North American manufacturing."
The total investment of $373.8 million will be distributed as follows:
Toyota Motor Manufacturing, KY―$120,960,000
Bodine Aluminum Jackson, TN―$14,500,000
Toyota Motor Manufacturing, WV―$115,300,000
Toyota Motor Manufacturing, AL―$106,000,000
Bodine Aluminum Troy, MO―$17,050,000
These projects, and others previously announced, move Toyota nearly halfway ($4.1 billion) toward its commitment to invest $10 billion in the U.S. as announced by CEO Akio Toyoda in January 2017.