Toyota ends operations in Russia

• Declares $2.5B investment in US battery production

Amid Russia’s ongoing war with Ukraine, Toyota announced it will permanently end vehicle manufacturing operations at its plant in Saint Petersburg. This represents all Toyota vehicle manufacturing in Russia, though the company will retain a presence in Moscow to support retail operations.

Toyota suspended operations at the Saint Petersburg facility on March 4, just over a week after Russia launched its invasion. Sanctions placed on Russia caused severe interruptions in supply lines, though Toyota has kept the plant in a ready-to-launch state for the last seven months should circumstances change.

In a statement from Toyota released on September 23, the company sees no indication of restarting operations anytime soon, thus making the closure permanent. Employees affected by the closure will receive assistance from Toyota for re-employment, training for new skills, and “well-being, including financial support above legal requirements.”

Construction of the Saint Petersburg facility began in 2005. Production launched in 2007 with the Toyota Camry, and later expanded to include the RAV4 in 2016. At full capacity, the plant could build 100,000 vehicles a year which were sold primarily in Russia.

Some models were exported to nearby countries such as Belarus. As for the plant’s future, Automotive News Europe reports that Toyota could sell the facility though nothing is official. A Toyota spokesperson told the publication that, if the factory is sold, it won’t simply build rebadged Toyotas.

The end of manufacturing in Russia doesn’t mean Toyota will leave the country entirely. With vehicles on the road and a retail network in place, the automaker will still have a presence in Moscow to handle service for existing Toyota and Lexus customers. However, even that part of the business will be restructured to fit the current situation.

Meanwhile, Toyota says it wants to boost the production of batteries for EVs for which “demand is growing.”

The Japanese automaker has just announced a massive new investment in battery production with a total of 730 billion yen to be invested in Japan and the United States. This figure equals approximately $5.6 billion, roughly $2.5 billion of which will be invested in the Toyota Battery Manufacturing in North Carolina. There’s just one clear goal – increasing automotive battery production.

The investment is part of Toyota’s strategy to build a complete supply system for the production of electric vehicles. A key part of this system is the supply of automotive batteries from its partners and its own production plants.

Ultimately, the manufacturer wants to reduce CO2 emissions as much as possible and as quickly as possible in all regions and markets around the world. To achieve that, Toyota will offer multiple powertrain options tailored to the needs of the local customers.

Thanks to the new investment, the combined battery production capacity in Japan and the United States will be increased by up to 40 GWh. As part of the investment, the company will build more efficient production lines than before and will educate the personnel engaged in battery production.

The actual battery production following this new investment is expected to begin between 2024 and 2026 and utilize the global Toyota Production System. Batteries produced in Japan and America will be exported to all markets where Toyota sells electric vehicles.

The bZ4x is currently Toyota’s only purely electric vehicle on sale. It will be joined by the bZ3 which is likely to remain a China-only product. A larger bZ5 electric sedan is also on its way and a few more battery-powered models will follow shortly.