With profits surging after 2024 scandal, Toyota eyes worldwide EV investments

• A scandal in 2024 saw Toyota apologize for improper vehicle testing, which caused profits to decline. Now, the company is surging and has worldwide investments in mind.
• In China, Toyota looks to set up a new company to compete with the country’s surging domestic EV market.
• In the U.S., Toyota’s new $14 billion EV battery plant in North Carolina is set to begin shipping product in April.

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As Toyota’s profits recover from a scandal in 2024 that saw the company apologize for conducting falsified safety and engine power tests, it’s looking at making investments in the electric vehicle industry. The automaker has a $14 billion plant making electric vehicle batteries set to start production in North Carolina and is making moves to expand further into China.

What was the scandal about?

In early 2024, the Japanese government investigated Toyota, revealing that tests on engine power, collision and airbag inflation were being improperly conducted.

In a conference, Toyota Chairman Akio Toyoda apologized, saying, “We are not a perfect company.”

The tests were also found to have been conducted on discontinued models and led the company to suspend production on two Corolla models, the Axio and Fielder, and on the Yaris Cross.

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Why is Toyota expanding now?

After the scandal in 2024, Toyota took a hit to sales and has slowly been recovering since then. It posted its Q3 earnings report on Wednesday, Feb. 5, which appeared to show sales starting to rebound between April and December 2024.

The report shows that fiscal profits in the third quarter were up 61%, charting $14 billion, with $81 billion in sales.

Toyota is looking to expand in China

After striking a deal with the local government in Shanghai, China, the automaker intends to set up shop there, creating a new company, which plans on producing new Lexus EVs, beginning in 2027.

It intends to produce around 100,000 of the vehicles in its first year, seeking to compete with BYD and other Chinese producers of EVs.

A new production center in the U.S.

Alongside these future plans in China, one of Toyota’s projects is coming to fruition in the United States. It plans on beginning production at its new facility in North Carolina in April 2025.

The plant will produce batteries for EVs, plug-ins and hybrid vehicles in the states. It cost around $14 billion to get the plant operational and will employ an estimated 5,000 people. It’s Toyota’s 11th manufacturing plant in the U.S., but the first outside of Japan to fully produce such batteries.

How is the EV market doing?

While Toyota expands, the EV market seems to be somewhat unsteady. Ford said “headwinds” are causing losses in the domestic EV market, and General Motors just touted that their EVs became variable profit positive in 2024.

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Toyota’s chairman even stated last year that he believed EV adoption would eventually stall out, forecasting the market share of these models will max out around 30%. Now, the automaker is betting on electric offerings to help keep its resurgence going.