Toyota Group plans to invest 48 billion rupees (US$623.74 million) to make electric vehicle (EV) components in India, as the Japanese automaker works toward carbon neutrality by 2050.
Toyota Kirloskar Motor and Toyota Kirloskar Auto Parts signed a memorandum of understanding with the southern state of Karnataka to invest 41 billion rupees, the group said in a statement on Saturday.
The remaining 7 billion rupees is to come from Toyota Industries Engine India.
Toyota is aligning its own green targets with India’s ambitions of becoming an EV manufacturing hub, although the switch to clean transport in the South Asian nation is slower than in countries such as China and the US.
Expensive price tags, lack of options in electric models and insufficient charging stations have led to sluggish adoption of battery vehicles in India.
“From a direct employment point of view, we are looking at around 3,500 new jobs,” Toyota Kirloskar vice chairman Vikram Gulati told the Press Trust of India. “As the supply chain system builds, we expect much more to come in later.”
Indian automakers could generate US$20 billion in revenue from EVs between now and 2026, a forecast by CRISIL showed.
By 2040, 53 percent of new automobile sales in India are likely to be electric, compared with 77 percent in China, a BloombergNEF analysis showed.
Demand for Toyota’s plug-in hybrid vehicles has steadily grown, especially as gasoline prices have surged past US$4 per gallon (4.55 liters), pushing up its cumulative sales of eligible vehicles to 183,000 as of the end of last year, the analysis showed.
Toyota reported sales of another 8,421 plug-in hybrid and electric vehicles in the first quarter.
Automakers sold a record 657,000 hybrid or all-electric vehicles last year, BloombergNEF said.
While that accounted for only 4.4 percent of new automobile sales, it was double the level of a year earlier.
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