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On December 6, Toyota Motor (TM -3.31%) did its best to make up for the lost time and announced its intention to build an electric vehicle (EV) battery factory in North Carolina. In recent years, the popularity of electric vehicles has caught Toyota by surprise. Now the Japanese company is struggling to catch up with a new factory that is said to be capable of producing approximately 800,000 electric vehicle batteries per year. It is planned to expand the production of approximately 1.2 million batteries in the future.

Toyota's action was considered a powerful move three years ago. But now at least two other major automakers will consider the old news announced by Toyota. Their efforts may have plunged Toyota into the rearview mirror.

According to the press release, Toyota has allocated US$1.29 billion for its North Carolina project. The plant is called Toyota Battery Manufacturing Company of North Carolina (TBMNC) and is also known as Greensboro-Randolph Megasite in company literature. "The title echoes. Ted Ogawa, CEO of Toyota Motor North America, stated that North Carolina provides "infrastructure, [a] a high-quality education system, a diverse and skilled workforce, and a pleasant business environment."

The company also receives incentives from the state, from tax relief to cash, if its construction plan is implemented, it will increase by about 430 million U.S. dollars. Toyota has also set aside approximately US$2.1 billion to further increase its electric vehicle and battery manufacturing capabilities in the United States.

Without further background, Toyota's plan looks like a vigorous entry into the field of electric vehicle manufacturing. Unfortunately, it came too late for the company's competitive position. The plant will not start producing batteries until sometime in 2025. When the automaker launched its concept car for its all-electric bZ4X sports utility vehicle (SUV) in June, the automaker also stated that its “future lineup will be equipped with 15 dedicated BEVs” (battery electric vehicles) and that it will be no later than 2025. 55 hybrid models launched.

Assuming that there are no production delays or other problems, Toyota's electric vehicles were delayed for about four years before entering the showroom, and the Japanese automaker was clearly lagging behind its competitors. At least two companies are currently demonstrating their electric muscles, and there are likely to be millions of cars on the road before the first consumer-oriented Toyota electric car rolls off the assembly line.

Although alternative entrepreneur Elon Musk’s Tesla is still the favorite target of negative reviews and "doom and pessimistic" expert predictions, the company remains stubbornly successful overall. It has performed poorly in recent days, but its valuation is still above US$1 trillion, and sales have soared 87% in the past 12 months.

Tesla has a first-mover advantage, and its competitors are difficult to challenge, let alone defeat. It has positioned itself as a leader in the electric vehicle market when it is likely to transition from internal combustion engines (ICE) to electric vehicles in the near future. Although the advertising budget is close to zero, its name is very eye-catching, and large factories are being invested in to meet growing demand. Once the electric metamorphosis "takes off", it may help capture market share.

Tesla's sales in Germany soared by 234% in November, while German car sales fell by 32% in the entire market that month. At the same time, rumors from Germany indicate that the Berlin Gigafactory may be approved to start operations in the near future, starting from January 2022 to produce 1,000 Model Y a week, and start production from there. In China, another huge potential market, the Shanghai Super Factory has produced electric vehicles at a rate of 450,000 vehicles per year, and the planned expansion may soon increase to 1 million vehicles or even 1.5 million vehicles per year. Tesla's Gigafactory in Austin recently relocated its headquarters. This is a $1 billion factory that is expected to be put into use by the end of 2021 and is said to be capable of producing 500,000 cars per year.

Tesla has almost completed a much larger manufacturing capacity building than Toyota, and deliveries may increase by 50% in the next year. Although Tesla’s electric vehicle market share in the United States has fallen from 79.5% in 2020 to 66.3%, it still dominates and currently beats Daimler (DAI -0.68%) subsidiary Mercedes in the luxury car segment -Mercedes-Benz, international sales soared.

Ford (F-4.59%) orders more than 150,000 units for the upcoming F-150 Lightning pickup truck, and recently severed its relationship with electric vehicle company Rivian (RIVN 0.97%). Blue Oval is now confident enough in its progress in design and production capabilities to "act alone" in electric car manufacturing without Rivian’s help, if it decides to sell a large amount of it in this much younger company Shares, it may get a major cash windfall. 

Ford also made a large-scale joint investment of US$11.5 billion (in cooperation with a Korean electric vehicle battery company) to build a series of battery factories across the United States, the largest of which is the Blue Oval in Tennessee. After these new plants go online in 2025, they will produce 86 GWh of batteries each year. In the same year, Toyota plans to start operations at the North Carolina plant.

However, Ford's electric car plans are progressing faster. In a recent tweet, CEO Jim Farley pointed out that by the end of 2023, the automaker’s electric vehicle production should be twice as much as originally planned, or about 600,000 vehicles per year. "That was before [Blue Oval City] and other electric car sites went live," Farley added. In short, Ford expects to be close to Toyota's planned production capacity in 2025 in 2023, and to carry out large-scale manufacturing expansion in the same year Toyota has just started.

When it comes to opening up a leading market share in the rapidly growing electric vehicle field, with Tesla’s existing leadership and Ford’s huge and rapid advancement plan to enter the market, rubber has begun to hit the road. Toyota's delay in entering the electric vehicle market may limit its growth in the industry. For those who invest in electric vehicle stocks, Ford and Tesla are currently better choices. 

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