Friday, September 22, 2023

Toyota commits to $1.3B N.C. plant, aided by $435M in incentives

Toyota Motor North America plans to invest $1.29 billion and add 1,750 jobs at a battery making plant at the Greensboro Randolph Megasite in north Randolph County, the Japanese automaker confirmed today after weeks of speculation. Production is expected to start in 2025.

State and local leaders are offering Toyota a package of performance-based economic development incentives valued at more than $435 million. Most of the money hinges on hitting targets for investment and new jobs over a 20-year period. It marks one of the largest incentive offers in state history, though it’s less than the $846 million in incentives offered to Apple for new offices in Wake County and expansion of its Catawba County data center.

The Department of Commerce’s Economic Investment Committee approved the state incentives package on Monday morning, with a formal announcement at the site later Monday afternoon with Gov. Roy Cooper and other officials. The state’s incentives total $271.4 million, while Randolph County government is providing $167.3 in local incentives.

About $87 million of the state’s incentives will be through the Jobs Development Investment Grant program, while the rest will come through community college training initiatives, Department of Transportation improvements at the site and $40 million from the Golden LEAF Foundation.

Nine other states competed for the plant, officials said. Toyota’s decision comes after nearly a decade of land acquisitions and site preparation at the 1,900-acre site that is about 25 miles south of Greensboro. 

The site sits off the U.S. 421 freeway (designated future Interstate 685) about 18 miles southeast of downtown Greensboro and 20 miles northeast of Asheboro. It’s between the town of Liberty, population 2,600, and the Guilford County crossroads community of Julian.

North Carolina is the last southern state to attract a major automotive manufacturing plant. Various automakers have considered N.C. sites, but wound up choosing other states that traditional offered more generous incentives. State lawmakers revised the rules in recent years by permitting much larger incentive offers.

Toyota operates auto and truck assembly plants in Alabama, Indiana, Kentucky, Missouri and Texas. While it offers hydrogen vehicles and hybrids, the giant Japanese automaker doesn’t have a plant for fully electric vehicles, a market dominated by Tesla. As a result, investors now value Telsa at nearly $1 billion, compared with about Toyota’s  $255 billion market capitalization.

Many N.C. officials expect the company will locate a vehicle factory adjacent to the battery site.

The megasite is a joint venture of the Greensboro-Randolph Megasite Foundation and the Randolph County Economic Development Corp. The North Carolina Railroad Company invested about $35 million to buy more than 50% of the land which is near U.S. 421. Others that have invested in the site include the city of Greensboro, Randolph County and the Bryan Foundation.

Toyota considered other unnamed locations in other states before picking North Carolina because of its central location, regional workforce and transportation infrastructure, project officials said.

Electric vehicles make up less than 3% of U.S. auto sales, but they are expected to exceed 10% by 2025, while industry officials have pledged to reach 50% by 2030. Ford and General Motors have announced electric battery plants in Kentucky, Ohio and Tennessee.

News of the pending Toyota deal started to circulate on Nov. 15, when lawmakers released the final state budget bill with an incentives provision that directed more than $300 million to incentives for an employer looking at the megasite. The budget provision didn’t name the company but noted that the incentives targeted a project with at least a $1 billion investment and more than 1,750 jobs.

Toyota isn’t the only big jobs deal in the works for the Triad area. Budget legislation has also directed $106 million for airport improvements at Piedmont Triad International Airport in anticipation of a “high-yield” airplane manufacturing project that would bring at least 1,750 jobs.

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