The Toyota subsidiary Primearth EV Energy, which is also partly owned by Panasonic, is planning to build a fourth factory in China.
According to Japanese business newspaper Nikkei, the plan is to complete construction of the factory by 2021, when it will deliver an output of around 100,000 batteries per year. This will increase the total capacity in China to 400,000 units per year and will be the NiMH batteries known from Toyota hybrid cars.
Primearth EV, often referred to only as PEVE, currently produces the nickel metal hydride batteries in a plant in the Chinese province of Jiangsu. Two further plants are already under construction and are scheduled to start production this year.
According to Nikkei, the decision for the fourth plant depended primarily on the government in Beijing. In July, the new regulations for New Energy Vehicles (NEV) for the first time also improved the situation for full hybrids – so far only PHEV, FCEV or BEV have been promoted. Although hybrids are still considered combustion engines, they are also considered “passenger cars with low fuel consumption”. In future, they are to receive fewer negative points and thus be better placed than pure combustion engines. The incentive for manufacturers to also offer attractive hybrids is to be increased in this way.
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For Toyota, which holds 80.5 per cent of the shares in Primearth EV, the business prospects for hybrid vehicles in China seem to be much better. The investment in the plant for hybrid batteries could validate the fears of several experts from China, who suspected that the sale of electric cars could suffer as a result of the improved position of hybrids: If manufacturers have to make up fewer points thanks to hybrids, this makes the billions invested in electric cars less attractive.
Toyota and Panasonic aim to make their battery business more cost-effective and more comprehensive, thus being able to hold ground against emerging Chinese companies. Battery costs have proven to be a big hurdle to Toyota’s goal of roughly tripling annual sales of electrified vehicles to 5.5 million by 2030, but the carmaker hopes to overcome this through the joint venture activities with Panasonic.
In the early 2020s, Toyota and Panasonic intend to produce batteries with 50 times the capacity of today’s hybrid vehicles, while keeping production costs low through higher unit numbers.