Toyota plans to invest $624 million to make EV parts in India as part of climate goal

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Toyota Group plans to invest 48 billion rupees ($624 million) to make electric vehicle components in India, as the Japanese carmaker 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 rest will come from Toyota Industries Engine India.

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Toyota is aligning its own green targets with India’s ambitions of becoming a manufacturing hub though the switch to clean transport in the South Asian nation is slower than other 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 in an interview. “As the supply chain system builds, we expect much more to come in later.”

Indian automakers could generate $20 billion in revenue fromelectric vehicles between now and fiscal year 2026, according to forecast by Crisil. By 2040, 53 percent of new automobile sales in India will be electric, compared with 77 percent in China, according to BloombergNEF.

Read more: Toyota, Mazda plan $1.6 bln US plant, to partner in EVs

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