As someone who lives a few miles from Georgetown, KY, it's important to note that this factory already exists and sounds like they are (partially) re-tooling it to begin EV production. So that might explain the dollar figure.
>For context: Tesla is guiding for $10+B a year capex spending for the next 3 years.
I know people around these parts think that Tesla has uncovered some magical factory building ability, but can you even consider the fact that maybe Toyota knows what they are doing?
>Toyota is still under-investing in EV. $1.3B is nothing.
I do believe that Tesla's success in the last decade was in large part due to the fact it was the only technology company that could use all the money people were throwing at technology companies.
>> 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.
Hydrogen as a sole technology is going to keep eating that 2-3x energy penalty versus batteries regardless of storage tech. Hydrogen IC has even worse efficiency than FC. The only exception would be if hydrogen mining yields world-changing amounts of the stuff.
As a hybrid technology, it has a case. If you run 80% of the time on battery and 20% of the time on hydrogen at 50% RTE, you burn 120% of the fuel. But if you weigh 30% less, you could end up saving energy. The up to 60% efficiency of the fuel cell is losing energy as heat, and people like to run the heater, so some of that energy isn't lost in appropriate climates. And of course, refueling is faster for road trips. The best system weight is probably for the experimental direct-ammonia alkaline membrane fuel cells, assuming it's possible to stabilize them, because ammonia fuel systems (about 100 psi) are much simpler than hydrogen systems (about 10000 psi!). So there's a little room left for the hydrogen fans. But it's fundamentally a battery-powered car most of the time.
Bet 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.
Exactly. Toyota's CEO also explained a few weeks ago that they need to build cars for the whole world. Many countries are not ready yet with infrastructure for electric cars.
I would also add since insurance companies don't want to insure the transportation of batteries in container ships, it makes it difficult for Toyota to produce electric cars in all regions, it would mean they would always need to have a battery factory nearby.
https://toyotatimes.jp/en/toyota_news/1055_1.html#anchorTitl...
Globalization 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.
Cars, and EVs in particular have strong protectionist laws in the US that make it more expensive to import vehicles than to build them locally. There are a few other sectors like semiconductor fabs where we have started to introduce protectionist policies but I haven't seen any movement to expand those types of policies to most other manufacturing sectors.
Seems 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?
Not convinced: Not enough workers with the appropriate expertise to outmatch China and there is no appetite to import more people from either side of the aisle (despite what you might hear in the news).
>But people might be more happy walking, biking, etc.
No scenario where division does not increase especially after this upcoming election.
This 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.
> I dont quite understand why the sales of EVs in the US is considered to have flattened out according to some statistics.
Politics. Some people want it to be true, so they conflate an easing of the growth rate as an actual rate reduction. It could also be innocent ignorance of statistics.
The real hang up with EVs right now is primarily price. They're just reaching the point where TCO is a wash. Historically, most people are extremely responsive to fuel cost advantages, so as the capital cost comes down most people will switch. At least the ones who can charge at home, which is most.
I do feel bad for people who live in places with high electricity prices, like California and Massachusetts. Makes it harder to win on TCO, but at least the convenience factor is still there. But for those who can access sub-10 cent per kWh pricing, it's nice to spend a few hundred dollars per year for fuel.
My 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)
More generally, the IRA and the Infrastructure Investment and Jobs Act, and the CHIPS act has encouraged investment in US manufacturing, which is surging.
US domestic manufacturing became a major theme in the last two prior US elections.
If you look at growth charts in US factory capital it started spiking just before the signing of CHIPS act which was pitched to congress in 2019, which was a bipartisan effort seeded from the Trump admin.
But it's success will be defined on how successful the factories are, not just how many billions/trillions of free $$ the US gov gives to megacorps to prop up these projects. We've seen many, many gov-incentivized factory announcements that went no where. Or worse wasted a ton of time & money of local govs + small town employees. The Obama admin had a few really bad examples of this.
I'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.
An 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].
I 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.
I 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.
I doubt that will be a problem here. Their Kentucky plant is huge, it's been around for decades and it makes lots of high quality cars including the Camry. Toyota goes to a lot of effort to teach the workers their production system and culture.
I 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.
The 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.
In 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.
The Kentucky plant will produce the upcoming 3-row BEV called bZ5X. Additional BEVs have been announced for 2026 and will likely share battery components from Kentucky and the new battery factory being built in North Carolina.
I 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.
"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.
Let’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.
lol
#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)
TMMK (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.
On 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)
State 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.
They should unionize. In fact UAW wants to unionize all automakers including Tesla and the ones in the south. They failed in the past but with the downward trajectory of population size, there is a great opportunity here.
Now you might say they will just leave the US and manufacture elsewhere. Well thats where tariffs come in and the UAW is a core voting block so they will have to alter any plans to move to Mexico. Higher inflation will be the result but its probably worth it long term.
Sorry, but to be frank, you just don't know what you're talking about.
I did a co-op at TMMK in Georgetown, KY many moons ago and it was a short drive from Lexington where I was studying for my mech engineering degree at UK. It is a massive university with a solid engineering school, for the uninitiated. The metro also has an excellent network of technical colleges and during my various other stints over those years, I was always impressed with the quality of the workforce on the factory floors.
As someone born in the coalfields of Appalachia, I'll admit that the ignorant hillbilly stereotype has some merit, but that's two hours of interstate driving east of where this is happening and the cultures have almost nothing in common. Hill people don't really leave the hills and Lexington is quite the "big city" for where I come from, full of hifalutin Whole Foods shoppers. I think the series "Justified" does a good job of describing this phenomenon.
There is a lot more I could address about your thoughts on labor and poverty, but it's hard to move past your premise and I don't have time to write a treatise... but JD Vance did and it's pretty good.
Agree 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.
anonu|2 years ago
https://apnews.com/article/hyundai-georgia-electric-vehicle-...
belltaco|2 years ago
https://www.reuters.com/business/autos-transportation/commit...
Not to mention spending a lot on lobbying against clean air regulations aroun the world https://thedriven.io/2023/05/11/toyota-under-fire-for-anti-c...
downrightmike|2 years ago
kjksf|2 years ago
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
pawptart|2 years ago
itsoktocry|2 years ago
I know people around these parts think that Tesla has uncovered some magical factory building ability, but can you even consider the fact that maybe Toyota knows what they are doing?
>Toyota is still under-investing in EV. $1.3B is nothing.
This is one factory.
suoduandao3|2 years ago
apapapa|2 years ago
_ea1k|2 years ago
daveguy|2 years ago
Do you really think this $1.3B is Toyota's entire capex in EV?
sandworm101|2 years ago
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.
scythe|2 years ago
As a hybrid technology, it has a case. If you run 80% of the time on battery and 20% of the time on hydrogen at 50% RTE, you burn 120% of the fuel. But if you weigh 30% less, you could end up saving energy. The up to 60% efficiency of the fuel cell is losing energy as heat, and people like to run the heater, so some of that energy isn't lost in appropriate climates. And of course, refueling is faster for road trips. The best system weight is probably for the experimental direct-ammonia alkaline membrane fuel cells, assuming it's possible to stabilize them, because ammonia fuel systems (about 100 psi) are much simpler than hydrogen systems (about 10000 psi!). So there's a little room left for the hydrogen fans. But it's fundamentally a battery-powered car most of the time.
aaronbrethorst|2 years ago
DanielSantos|2 years ago
I would also add since insurance companies don't want to insure the transportation of batteries in container ships, it makes it difficult for Toyota to produce electric cars in all regions, it would mean they would always need to have a battery factory nearby. https://toyotatimes.jp/en/toyota_news/1055_1.html#anchorTitl...
grecy|2 years ago
That sounds really interesting, I'd love to learn more. What such revolutions has Toyota survived?
costanzaDynasty|2 years ago
pavon|2 years ago
trgn|2 years ago
nebula8804|2 years ago
>But people might be more happy walking, biking, etc.
No scenario where division does not increase especially after this upcoming election.
charles_f|2 years ago
ThinkBeat|2 years ago
I dont quite understand why the sales of EVs in the US is considered to have flattened out according to some statistics.
rootusrootus|2 years ago
Politics. Some people want it to be true, so they conflate an easing of the growth rate as an actual rate reduction. It could also be innocent ignorance of statistics.
The real hang up with EVs right now is primarily price. They're just reaching the point where TCO is a wash. Historically, most people are extremely responsive to fuel cost advantages, so as the capital cost comes down most people will switch. At least the ones who can charge at home, which is most.
I do feel bad for people who live in places with high electricity prices, like California and Massachusetts. Makes it harder to win on TCO, but at least the convenience factor is still there. But for those who can access sub-10 cent per kWh pricing, it's nice to spend a few hundred dollars per year for fuel.
njarboe|2 years ago
skeeter2020|2 years ago
jonnycomputer|2 years ago
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...
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...
dmix|2 years ago
If you look at growth charts in US factory capital it started spiking just before the signing of CHIPS act which was pitched to congress in 2019, which was a bipartisan effort seeded from the Trump admin.
https://en.wikipedia.org/wiki/CHIPS_and_Science_Act
And the Infrastructure Investment and Jobs Act which Biden admin pitched to congress, which also got pretty smooth bipartisan support:
https://en.wikipedia.org/wiki/Infrastructure_Investment_and_...
But it's success will be defined on how successful the factories are, not just how many billions/trillions of free $$ the US gov gives to megacorps to prop up these projects. We've seen many, many gov-incentivized factory announcements that went no where. Or worse wasted a ton of time & money of local govs + small town employees. The Obama admin had a few really bad examples of this.
thinkingtoilet|2 years ago
the_third_wave|2 years ago
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-3...
[2] https://www.reuters.com/business/autos-transportation/volksw...
earthwalker99|2 years ago
itsoktocry|2 years ago
Sometimes investment makes sense, and then things change and it doesn't make sense anymore. That's fair, isn't it?
hintymad|2 years ago
ericmay|2 years ago
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.
thedaly|2 years ago
What metrics is this based on?
wongarsu|2 years ago
I'm pretty sure every country says that about themselves. It's more a statement of national pride than of fact.
achates|2 years ago
itomato|2 years ago
bhpm|2 years ago
mywittyname|2 years ago
The Georgetown plant currently produces Camry and Rav4.
_ea1k|2 years ago
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.
mdorazio|2 years ago
punkybr3wster|2 years ago
Rebelgecko|2 years ago
hettygreen|2 years ago
psychlops|2 years ago
itsoktocry|2 years ago
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.
josefresco|2 years ago
https://www.kentucky.com/news/business/article143755074.html
kycommenter|2 years ago
xyst|2 years ago
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.
brandonagr2|2 years ago
folkclarity|2 years ago
[deleted]
folkclarity|2 years ago
[deleted]
kyevevevev|2 years ago
[0]https://www _ copilotsearch _ com/posts/states-with-the-most-electric-vehicles/
oflannabhra|2 years ago
Seems like a smart place to build your own batteries to me.
rootusrootus|2 years ago
xyst|2 years ago
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|2 years ago
themaninthedark|2 years ago
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.
nebula8804|2 years ago
Now you might say they will just leave the US and manufacture elsewhere. Well thats where tariffs come in and the UAW is a core voting block so they will have to alter any plans to move to Mexico. Higher inflation will be the result but its probably worth it long term.
mp05|2 years ago
Sorry, but to be frank, you just don't know what you're talking about.
I did a co-op at TMMK in Georgetown, KY many moons ago and it was a short drive from Lexington where I was studying for my mech engineering degree at UK. It is a massive university with a solid engineering school, for the uninitiated. The metro also has an excellent network of technical colleges and during my various other stints over those years, I was always impressed with the quality of the workforce on the factory floors.
As someone born in the coalfields of Appalachia, I'll admit that the ignorant hillbilly stereotype has some merit, but that's two hours of interstate driving east of where this is happening and the cultures have almost nothing in common. Hill people don't really leave the hills and Lexington is quite the "big city" for where I come from, full of hifalutin Whole Foods shoppers. I think the series "Justified" does a good job of describing this phenomenon.
There is a lot more I could address about your thoughts on labor and poverty, but it's hard to move past your premise and I don't have time to write a treatise... but JD Vance did and it's pretty good.
unknown|2 years ago
[deleted]
rpcope1|2 years ago
2devnull|2 years ago