by Introduction
Toyota has postponed the construction of a new factory intended for electric vehicle battery production in Fukuoka Prefecture, Japan, for the second time this year. This decision, although not unexpected, highlights the automaker’s cautious approach against the backdrop of fluctuations in global demand for electric vehicles.
Terms and Commitments
Sales of Toyota’s electric cars have slowed down, but the company confirms that the factory will still be built in the future. According to representatives, Toyota paid about 6 billion yen, equivalent to 39 million US dollars, for a plot in an industrial development zone in northeastern Fukuoka Prefecture. As part of the agreement, the company agreed to begin construction within three years.
Impact of Financial Results
Despite this, the automaker announced in March that it would delay work at the site due to declining demand for its electric vehicles. The Governor of Fukuoka and Toyota President Koji Sato confirmed that the construction has been postponed for the second time. Production was initially planned to start in 2028, but an updated schedule has not yet been provided.
The news of the delay coincided with Toyota’s latest earnings report. The company lowered its global electric vehicle sales expectations by 10 percent from the previous forecast of 277,000 units for the fiscal year ending in March 2026. However, Toyota did not rule out adjusting its long-term goals, including the target of achieving 1.5 million global electric vehicle sales in 2026, which may change depending on market conditions.
Strategy and Investments
It is important to note that Toyota continues to invest significant funds in new electric cars and factories. It is working on opening a new factory in Shanghai, China, around 2027 to produce Lexus electric vehicles. This facility is likely to produce the LF-ZC and LF-ZL models, which were presented several years ago as concepts.
Sales of Toyota’s electric cars for the first nine months of the year actually increased by 20.6 percent to 117,031 units, but this figure still turned out to be lower than expected. As long as the company is not confident that sales will increase significantly, there is no sense in rushing the construction of new factories that may stand idle or operate at less than full capacity.
These decisions by Toyota reflect general trends in the automotive industry, where many manufacturers are facing uncertainty regarding the transition to electric vehicles. While investments in electric vehicles remain a priority, the pace of development often depends on regional markets, charging infrastructure, and economic conditions. For example, plans for the factory in China may be more stable due to strong government support and high demand in that region, which contrasts with the situation in Japan, where the electric vehicle market is developing more slowly.
