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Toyota to invest $1.3B in Kentucky factory to build battery packs and new EV
- folkclarity 3y ago[dead]
- folkclarity 3y ago[flagged]
- psychlops 3y agoHow much does Toyota pay in taxes in Kentucky or are we subsidizing the factory?
- josefresco 3y ago"KEDFA approved the $43.5 million tax incentives shortly after the Toyota expansion announcement was made Monday. The dollar figure combines the incentives from the Lexus expansion in 2015 with the latest investment for a total of $190 million in incentives, said Jack Mazurak, communications director at KEDFA. https://www.kentucky.com/news/business/article143755074.html https://www.kentucky.com/news/business/article143755074.html
- itsoktocry 3y agoI don't think there is such thing as manufacturing investment without subsidization any more. And it most often results in the Winner's Curse: the entity providing the greatest subsidies win's the "investment", but they give up so much in the process that the economic benefits are wiped out. See: Tesla in Buffalo, VW in Ontario, FoxConn in Wisconsin.
- psychlops 3y agoOverall, yes. But I suspect there are winners if we could follow the money trail.
- _ea1k 3y agoI'm not sure if I agree, tbh. You've certainly brought up some good cases of failures, but what about: Tesla in Sparks NV, BMW in Greer SC, or Mercedes in Alabama and SC? It seems like those have more than paid for themselves by now. In at least one of those cases, they've had huge regional impacts.
- itsoktocry 3y ago>Tesla in Sparks NV Ironically, you go to the website and there's a fake image of the factory, based on previous promises. I can't speak to the others, but I'm sure there's some positive outliers!
- _ea1k 3y agoWhy assume they are outliers? It seems like there are more successes than failures, just that the failures get attention.
- itsoktocry 3y ago>Why assume they are outliers? Because when the government hands tax money over to profitable companies to "create jobs", you are inherently distorting the market. >It seems like there are more successes than failures Maybe, but I'm skeptical.
- api 3y agoIt's true globally too. China heavily subsidizes their industrial base as do many other countries. When everyone else is subsidizing you have to subsidize too or you lose.
- onlyrealcuzzo 3y agoFoxconn in Wisconsin is the one people love to mention. AFAIK - they got $3B in FUTURE benefits - of which none came to fruition. Foxconn delivered nothing and also got almost nothing (~1% of that $3B). Yeah - it was a dumb political stunt - and it unfortunately worked for the time. But it wasn't the massive financial disaster people think it was.
- xyst 3y agoLet’s be honest. Southern state probably lured them in with a nice package. Toyota has been moving ops to states with lower cost of living for awhile now. Toyota corp in USA shifted ops from CA to TX a decade back. Many workers hate or regret the move. C-level executives are excited because they pay less in state taxes. Probably even got a nice deal on the land.
- bhpm 3y agoToyota broke ground in San Antonio more than two decades ago, in 2003, not one. Georgetown KY has been around since 1986 and Princeton IN since 1996. Toyota has been investing in “low cost of living” states for a very long time.
- brandonagr2 3y agoHow much is the currently empty field where the factory will be built currently contributing to tax revenue?
- kycommenter 3y agoI don't know how much they currently pay in taxes, but when Toyota built the plant in the 80's, Kentucky gave $125M in incentives. https://en.wikipedia.org/wiki/Martha_Layne_Collins#Toyota_Assembly_Plant https://en.wikipedia.org/wiki/Martha_Layne_Collins#Toyota_As...
- earthwalker99 3y agoFord made these same promises 2 years ago then bailed when the interest rate rose.
- itsoktocry 3y ago>Ford made these same promises 2 years ago then bailed when the interest rate rose. Sometimes investment makes sense, and then things change and it doesn't make sense anymore. That's fair, isn't it?
- earthwalker99 3y agoFair? What would that even mean? These empty promises are how we ended up electing Trump the first time and it's virtually guaranteeing that we'll elect him a second time. Rural Kentucky is in horrible shape and a lot of people here were placing hope in this, much like they have so many other empty promises from their leaders, so at least stop acting surprised when the consequences show themselves.
- psychlops 3y agoHe means that companies exist to make a profit, supply customers and their needs and to pay employees. If they make a promise to spend money and economic conditions change to the extent that they would lose money, it makes sense to not continue with that commitment. Comparing a company making a profit with a politician trying to get elected is not fair.
- thfuran 3y agoThat's not how promises or commitments work. It's true that that describes the behavior of profit maximization engines, but the language of your justification implies wrongdoing.
- jonnycomputer 3y agoIt's not a mirage. Manufacturing investment is happening. https://www2.deloitte.com/us/en/insights/industry/manufacturing/manufacturing-industry-outlook.html https://www2.deloitte.com/us/en/insights/industry/manufactur... Mostly in red-states, tbh, because they have fewer regulations slowing down building stuff. Also, Trump is a prove loser who will lose again.
- kjksf 3y ago$1.3B seems like a lot of money but it isn't for a car factory, especially spread over many years. For context: Tesla is guiding for $10+B a year capex spending for the next 3 years. Nevada factory took $6.2B and Tesla plans to spend additional $3.6B Toyota is still under-investing in EV. $1.3B is nothing. https://www.tesla.com/blog/continuing-our-investment-nevada https://www.tesla.com/blog/continuing-our-investment-nevada
- _ea1k 3y agoYeah, it must be less than 1% of revenue. Probably a lot less, given that it is likely spread over several years.
- jgalt212 3y agoIt feels "right-sized" given Toyota's approach towards EV's and the slowing adoption rate of EVs in the US.
- dumbo-octopus 3y agoToyota initiated the hybrid as a modern platform, and they continue make the best selling hybrid in the world (Prius). But since they don't want to be in the business of making undesirable vehicles with short lifespans that require expensive maintenance, they have stuck to hybrids rather than full electric and all the extremely costly low lifespan batteries that go into them. Speaking as a 2004 Prius daily driver, the Toyota approach works. And I guarantee I'm a hell of a lot more "environmentally friendly" than anyone who commissioned literal tons of metal to be dug out of the earth to make their "green" new Tesla.
- throw0101b 3y ago> Toyota initiated the hybrid as a modern platform […] E.g., the first Prius was released in 1997: * https://en.wikipedia.org/wiki/Toyota_Prius_(XW10) https://en.wikipedia.org/wiki/Toyota_Prius_(XW10)
- 3y ago
- anonu 3y agoSimilarly, Hyundai building $8bn battery plant outside Savannah, Georgia: https://apnews.com/article/hyundai-georgia-electric-vehicle-ev-845e2729fd5220797e7984f424bc1d5c https://apnews.com/article/hyundai-georgia-electric-vehicle-...
- downrightmike 3y agoIts because the south is fairly young and impoverished, so cheaper to mfg there. Down vote, but that's the reason.
- justapassenger 3y ago[dead]
- frogpelt 3y agoHave you ever been to the south? The down votes are because your position is asinine. It's more likely that southern states are willing to throw huge incentive packages to these manufacturers. Probably not so much on the coasts or the northern states. Also, unions are less common in the south; those states tend to be right-to-work states. Finally, you used the word "impoverished", which is ridiculous. But wages are lower in the south so that is probably another reason.
- mopenstein 3y agoWages are less as is the cost of living. Everything is relative.
- anonu 3y agoSavannah and Brunswick are huge car export ports because many manufacturing facilities are spread out between South Carolina and Georgia: Volvo, Mercedes, BMW, Honda, KIA to name a few. These ports are also the largest on the Eastern seaboard of the US. So access to shipping is probably one of the main reasons. Also major demographic shifts to the Southeastern part of the US help supply the labor pool. Georgia and South Carolina tend to be the poorest states. The Poverty rate is around 14.5% for both. Compare that to California where the poverty rate is 12.5%. Though the poverty rate is lower, California has more people in poverty than Georgia and South Carolina combined. Anyway, using the word "impoverished" is grossly misleading.
- xyst 3y agoOn the bright side, some manufacturing jobs brought state side. On the other hand, it’s in KY. These multibillion dollar deals tend to land in states with the lowest cost of living, non-educated workforce, minimal enforcement/respect of environment (dump waste into rivers), and tend to be subsidized at the state and local levels. Apple opened up shop outside of Austin (ie, not Travis County) because of lower taxes and more incentives provided by other county. Multi Trillion dollar company by the way. Amazon has been opening up warehouses in the sticks, soaking up all of those incentives from those desperate small towns looking to giveaway the land for a couple of decades in exchange for short term gains (mayor/city council able to say, we brought X jobs to Y town!1). Yet another multibillion company taking advantage of the desperate. What do the people get in return? Getting the opportunity to work shit hours in a non-union job. Possibly back breaking work. No investment in their future. Just cogs in the wheel which are completely fungible (broke your back? File a claim with insurance. Fuck off. Deal with it. Not our problem. Then hire the next sucker to replace you. Rinse and repeat)
- Xirgil 3y agoYeah, those poor towns should just remain poor, definitely don't spend a billion dollars there, that would be terrible for them.
- 2devnull 3y agoAgree that often politicians sell out their people and natural resources (the rights and endowment of future citizens) for short term gain. This is a natural consequence of politicians being inherently terrible people by and large.
- themaninthedark 3y agoState environmental laws can be more restrictive than the Federal but not less, so if anyone is dumping into waterways the EPA can go after them. Don't know of many waterways that are solely in one state so the EPA automatically has jurisdiction as well. What is it that you are purposing? That companies don't go to states with low cost of living? The idea that "it's KY" is bigoted. They are people, just like anyone else. We don't tolerate it when others are dismissive of people based on their race and we should not be tolerant of the attitude based on where they live either.
- jonnycomputer 3y agoMore Biden policy winning back investment in America, is my take. Update: People who may not have been following closely what Biden has accomplished during his Presidency might have questions. In this case, the Inflation Reduction Act specifically has credits to encourage battery manufacture in the US. https://www.orrick.com/en/Insights/2022/11/Section-45X-of-th https://www.orrick.com/en/Insights/2022/11/Section-45X-of-th... More generally, the IRA and the Infrastructure Investment and Jobs Act, and the CHIPS act has encouraged investment in US manufacturing, which is surging. https://www2.deloitte.com/us/en/insights/industry/manufactur https://www2.deloitte.com/us/en/insights/industry/manufactur...
- thinkingtoilet 3y agoI'm left of Bernie and voted for Biden but I tend to not like takes like this. Is there a specific policy that he championed that is responsible for this? To me, it's like when people cheer a 'record stock market' as an example of a president's abilities, but fail to mention every single modern president has had a record stock market at some point in their term.
- jonnycomputer 3y agoYeah, the Inflation Reduction Act. https://www.orrick.com/en/Insights/2022/11/Section-45X-of-the-Inflation-Reduction-Act-New-Tax-Credits-Available-to-Battery-Manufacturers https://www.orrick.com/en/Insights/2022/11/Section-45X-of-th... More generally, the IRA and the Infrastructure Investment and Jobs Act https://en.wikipedia.org/wiki/Infrastructure_Investment_and_Jobs_Act https://en.wikipedia.org/wiki/Infrastructure_Investment_and_... https://www2.deloitte.com/us/en/insights/industry/manufacturing/manufacturing-industry-outlook.html https://www2.deloitte.com/us/en/insights/industry/manufactur... There's also the CHIPS act. By the way, anyone active in the green tech space knows that the IRA has been an absolute game-changer.
- oldpersonintx 3y ago[dead]
- bhpm 3y agoI am curious about what vehicles these will be for. When Toyota says “EVs” they often mean hybrids. The article makes this distinction, but Toyota didn’t in any statements.
- mywittyname 3y agoThe e-TNGA platform that underpins the BZ4x was supposed to have several more products built on it, including a larger SUV. This vehicle could be that SUV, or it could be one of the first products built on the platform that will replace the e-TNGA. The Georgetown plant currently produces Camry and Rav4.
- _ea1k 3y agoIn the US, some PHEVs with relatively small batteries can qualify for the full $7,500 tax credit. You might be on to something there. It would certainly explain the size of the investment. A $1.3B plant might not build a lot of EVs, but it could build quite a few PHEVs.
- enragedcacti 3y agoSpecifically it's 7kWh minimum in addition to all of the other sourcing and assembly requirements. In practice there haven't been any PHEVs with less, the smallest PHEV battery so far in the US is 8kWh in a Ferrari. It'll be interesting to see if more small battery PHEVs come out trying to target HEV price points with the tax credit. It would still be a huge jump up from standard hybrids which as far as I'm aware are rarely more than 1.5kWh. kWh makes sense if your goal is to stimulate US battery production but I really wish there were an all-electric range requirement, A hypothetical 6.8kWh Prius Prime would get more range that the 21kWh Wrangler 4xe. https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after https://www.irs.gov/credits-deductions/credits-for-new-clean...
- _ea1k 3y agoYeah, and the 7kwh should cost ~$1k. So if the manufacturer wants to maximize the number of $7,500 rebates, PHEV is the way to go. 11 PHEVs == one 300 mile compact crossover. They don't even have to be good PHEVs. I agree that there should have been a range requirement.
- the_third_wave 3y agoAn interesting contrast showed up in my RSS feed regarding this subject: First this HN post: Toyota to invest $1.3B in Kentucky factory to build battery packs and new EV A few lines below that: Toyota Refused To Hop On The Electric Vehicle Bandwagon, And It Paid Off Big Time [1] We'll see where the chips fall but thus far it seems Tesla is one of the few western companies which manages to profitably produce and sell consumer EVs. I suspect Chinese companies like BYD run at a profit as well but it is hard to get access to reliable data. Volkswagen seems to be aiming for 'profit parity for EVs' in 2025 but they seem to have a long way to go [2]. [1] https://dailycaller.com/2024/02/07/toyota-2023-fiscal-year-30-billion-profit-avoiding-electric-vehicles-hybrids/ https://dailycaller.com/2024/02/07/toyota-2023-fiscal-year-3... [2] https://www.reuters.com/business/autos-transportation/volkswagen-lags-behind-profitability-targets-q3-2023-10-26/ https://www.reuters.com/business/autos-transportation/volksw...
- costanzaDynasty 3y agoGlobalization is rolling back. It's about to be boom times in America as long as the politicians from all parties can actually move from one troth to another and actually pass bills.
- trgn 3y agoSeems to be almost daily news stories about huge capital investment in manufacturing in the US, a couple billion here, a couple billion there. Was I just blind to these 5-10 years ago?
- smileysteve 3y agoTargeted subsidies, the most recent bill to the IRA may be Cash For Clunkers.
- flextheruler 3y agoInflation reduction act
- babypuncher 3y agoNo, it's new as of the last ~2 years.
- Gibbon1 3y agoGeopolitics: China's sudden shift to authoritarianism under the new emperor has everyone fleeing for the exits as the US and Europe abandon the project to bring China into the club. Economics, Neoliberalism is dead. The pandemic killed it. Policy makers well understand the economy can tolerate a lot of disruption. Politics: Dispossessed voters turning to fascism has sharpened politicians and sane business leaders minds. Global Warning and new Tech: Solar, wind, batteries, and the need to faze out fossil fuels creates risks and opportunities. Risks will be born by those that try business as usual. Increased automation: Low skilled dirt cheap labor is less important than it was 20-30 years ago. That changes the balance point between low cost offshored labor and the pain in the ass that offshoring is.
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- Rebelgecko 3y agoIs this to make the solid state batteries that Toyota has been hyping up for a decade?
- kyevevevev 3y agolol #41. Kentucky [0] Percentage of registered vehicles that are electric: 0.06% Total registered electric vehicles: 2,650 (#33 overall) Number of statewide charging stations: 222 (#37 overall) Number of charging ports per 100 EVs: 19.9 (#21 overall) [0]https://www https://www _ copilotsearch _ com/posts/states-with-the-most-electric-vehicles/
- rootusrootus 3y ago#44 in income. That's the real reason to put a factory there. And it's a good reason why EV adoption would be low there as well.
- oflannabhra 3y agoTMMK (Toyota Motor Manufacturing Kentucky) has an $8B plant in Kentucky, the largest Toyota manufacturing facility in the world. This plant is where all Camry models are manufactured, which is the best-selling car in the United States. Additionally, all Rav4 Hybrid models are manufactured there, including all the motors (not just assembly). Seems like a smart place to build your own batteries to me.
- sandworm101 3y ago>> Environmental groups have long criticized Toyota for being slow to move toward fully electric vehicles, instead clinging to gas-electric hybrid technology. When you run a company as large and old as Toyota, you always hedge your bets. There are some other options to battery-powered electric vehicles (hydrogen IC). They are currently not as mature but anyone running something as big as Toyota needs to hedge against that sort of outlier tech. If Toyota abandoned IC, got rid of its IC production lines, they would suffer hugely if hydrogen IC one out as the green tech. All the major car companies do such things. That's why they have survived as long as they have. Would Tesla survive if a new hydrogen storage killed the market for battery-powered cars? Toyota has seen and survived a few such revolutions.
- aaronbrethorst 3y agoBet hedging would’ve meant introducing the BZ4X years ago. Instead, there were 8 years between when Toyota announced their first hydrogen car and their first electric vehicle. This if an example of simply betting wrong.
- oohffyvfg 3y agohydrogen was the right bet for trucks and buses. they are planning hide infrastructure in Asia. the world is not only southern California and Sweden.
- dalyons 3y agoI’m willing to bet hydrogen was the wrong bet for busses too, esp in Asia given the explosion of BEV tech and production coming out of china.
- oohffyvfg 3y agomy point is that exporting value added lithium have nothing to do about what is or isn't best. also my comment had a typo. wide not hide it's as disconnected as building roads and selling aluminum if you have bauxite ore.
- hintymad 3y agoI was wondering how the manufacturers address the potential culture conflicts. Obama's documentary American Factory revealed two notable contentions. One is that American workers think that the management is too tough on them while the management think that the workers are too unreasonable. The other is that Chinese workers are 30% (or 2X?) more efficient than American workers. I have no judgement on the first contention, but the second worries me. American labors were known to be the best in the world many years ago, and a strong argument against offshoring manufacturing was that Chinese workers were much worse than Americans. Yet the tide has turned.
- thedaly 3y ago> The other is that Chinese workers are 30% (or 2X?) more efficient than American workers. What metrics is this based on?
- CamperBob2 3y agoThe "two countries with very different labor laws" metric, I imagine.
- deleted 3y ago[deleted]
- ericmay 3y agoI don't really follow what you're trying to say with your last sentence and I'd be skeptical of a claim that Chinese workers are 30% more efficient, but Toyota, Honda, Nissan, and others have maintained US manufacturing facilities for decades and seem to be doing just fine with any potential culture conflicts. The 30% number you cite could be true but perhaps in order for Chinese (or any other country) manufacturing to be economical perhaps it needs to be 60%. Mexico is actually important here.
- wongarsu 3y agoToyota has manufacturing facilities in at least 16 countries, so they probably have this figured out. US import duties make it especially lucrative for manufacturers to have US facilities, which lines up with Toyota having 10 other facilities in the US, plus some in Canada and Mexico. Still, in my eyes that only makes it more intriguing how they bridge the cultural differences, since whatever they are doing seems to be working.
- ThinkBeat 3y agoThis is of course mostly due to the giant US subsidies the federal government is offering citizens now, but the EV must be "built" in the US (Which has some loopholes and strange definitions in it) I dont quite understand why the sales of EVs in the US is considered to have flattened out according to some statistics.
- skeeter2020 3y agoMy understanding is this is model and region dependent. Example: the Ford lightning has tepid demand in a lot of US markets and a multi-year waiting list in Canada. (I realize you're focused on US, but so much of the auto supply chain is coordinated between the 2 countries)
- rootusrootus 3y agoI like the Lightning but as a practical matter it's a little bit of a tough sell. Pickups are so terribly inefficient to begin with that it needs a boatload of battery just to have acceptable range. That's expensive, and also increases the time it takes to charge. I commend Ford for the ambition to make an electric version of their best selling vehicle, but I think that segment will be stronger when 200+ kWh batteries are affordable and flattish 350kW charge rates are the norm.
- njarboe 3y agoAll, or almost all EV brands in the US are selling less this year than last. Except Tesla, which has about 65% market share.
- rootusrootus 3y agoYou know this in February? The real point is that Tesla has been driving prices lower than other manufacturers are willing to stomach, and that resistance to price matching shows up as cars sitting on lots.
- davemp 3y ago
- hettygreen 3y agoAre there issues with these factories? environmental? safety?
- punkybr3wster 3y agoWhy companies put factories in states that actively go against the products they build is mind boggling.