(Bloomberg) —
Toyota Motor Corp. is planning to spend $88 million at an engine factory in West Virginia to boost production of gas-electric hybrid vehicles, an effort to widen its manufacturing footprint in the US as the Trump administration moves to impose tariffs on auto imports.
The Japanese carmaker is earmarking the funds to increase production of hybrid transaxles for next-generation hybrids at the Buffalo, West Virginia, plant by late 2026, bringing total investment at the facility to more than $2.8 billion, it said in a statement Wednesday. The spending will secure the continued employment of some 2,000 workers at the factory, but a Toyota spokesman said won’t result in any new jobs.
President Donald Trump singled out Toyota in remarks he made when announcing planned tariffs earlier this month targeting Japan and dozens of other nations. The carmaker has pushed back on criticism about its imports, saying it has invested $25 billion in American manufacturing since 2018. A new US duty on imported auto parts is set to go into effect on May 3.
Transaxles are used to transfer power among key components such as the engine, electric motor and wheels in fuel-efficient hybrid vehicles, demand for which is surging. In the first three months of the year, Toyota’s sales of hybrids in the US grew 40% from a year ago and accounted for more than half of all deliveries. The hybrid version of its best-selling RAV4 is one of the most popular vehicles in its fleet.
The Buffalo plant began making transaxles in 2020, becoming the first Toyota facility in North America to do so. They are used in US-assembled vehicles such as the Camry sedan, Corolla Cross crossover, Highlander SUV, Sienna minivan and two Lexus models. The company aims to grow its transaxle output capacity in West Virginia by more than one-quarter to 609,000 a year, up from 480,000 units currently, the spokesman said.
(Updates with Toyota’s total US investment since 2018 in third paragraph; An earlier version of this story corrected the spelling of West Virginia.)
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