Toyota is spending $35 billion on electric vehicles to close the gap on competitors

Toyota is siphoning more than $35 billion into electric vehicles as it attempts to find other global automakers in the race to cleaner vehicles.

The world’s biggest carmaker declared Tuesday that it would invest 4 trillion yen ($35.2 billion) in creating battery-powered electric vehicles somewhere in the range of 2022 and 2030 in a bid to mount a more serious challenge to adversaries like Tesla (TSLA), (GM) and Volkswagen (VLKAF).

A large chunk of that cash will go toward the actual batteries, with the Japanese organization submitting one more half-trillion yen ($4.4 billion to the technology on top of 1.5 trillion yen ($13.2 billion) previously declared.

The automaker as of now sells only a few thousand battery electric vehicles every year. Be that as it may, it presently plans to carry out upwards of 30 new models by 2030, determined to sell 3.5 million such vehicles each year by 2030, Toyota President Akio Toyoda said at a press briefing in Tokyo.

That would be over 33% of the organization’s sales last fiscal year, which added up to approximately 9 million vehicles around the world.

The Lexus luxury brand is an immense part of the new plan, with Toyota projecting 1 million global EV sales by 2030. Toyota wants all Lexus sales in Europe, North America, and China to be battery-powered electric vehicles before this current decade’s over, and globally by 2035.

Getting up to speed

While Toyota has been a pioneer in hybrid and even hydrogen fuel cell-powered vehicles, it has been a lot slower than some other significant automakers to expand into the fully-electric vehicle market.

Electric vehicles, including hybrid and fuel cell cars, represented almost 28% of the organization’s sales in the half-year finished September. In any case, battery-powered electric cars were a small part of that, making up only 0.1% of total sales.

In the mid-2000s, one of Toyota’s most conspicuous hybrids, the Prius, was gotten with the kind of excitement and wait for lists presently seen for Tesla models. Different automakers were criticized for not making comparative models at the time.

Right around 20 years later the sensation, notwithstanding, it is Toyota that is playing catchup in fully-electric cars and SUVs.

Remaining before more than a dozen electric vehicles on Tuesday, Toyoda referred to the new lineup as “our showroom of the future” and said the maker would likewise look to make its factories carbon neutral by 2035.

That moves up a past vow from the organization to become carbon neutral by 2050, which implies its cars and production processes won’t add carbon dioxide to the Earth’s atmosphere. Other industry players, like (GM) and Mercedes (DDAIF), have made comparable vows.

“The future that we showed you today is by no means far away,” Toyoda told reporters, adding that the vast majority of the models shown Tuesday would be released over the next few years.

In any case, competition is heightening. Simply last week, Volkswagen reported that it would raise its budget for electric vehicles, to $100 billion. The German behemoth, which has long been virtually neck and neck with Toyota in global sales, additionally said it trusted that 25% of its vehicle sales worldwide would be electric before the finish of 2026.

Red-hot demand

EV batteries are likewise becoming a hot topic among investors somewhere else in Asia.

This month, LG Energy Solution, a battery provider for any semblance of Hyundai (HYMTF) and Siemens (SIEGY), declared it would go public in South Korea, fully intent on raising to 12.75 trillion won ($10.8 billion).

The market debut, which is relied upon to happen in January, would be the country’s biggest initial public offering on record, as per Dealogic.

In a statement, LG Energy Solution CEO Young Soo Kwon said that the organization’s IPO was about “preemptively responding to the demand for the lithium-ion battery industry, expected to see rapid growth.”