Japanese carmaker Toyota (TM) is finally ready to begin production of the new three-row battery electric sport-utility vehicles (SUVs) it announced about a year and a half ago. The company had disclosed plans to invest $1.3 billion in its Kentucky plant as part of efforts to move towards electric vehicle production.
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However, it seems the news is not sparking much interest among investors, as the automaker’s shares dropped nearly 1% in early trading on Thursday morning, adding to the almost 2% decline from the day before.
The Kentucky site has been a key part of Toyota’s North American operations for almost four decades, producing, as part of its lineup, the Camry, one of the manufacturer’s most famous passenger cars in the United States.
Is Toyota Re-strategizing amid Trump Tariffs?
The latest development comes as Toyota appears to be making arrangements to boost its hybrid vehicle production in the U.S., while moving the luxury segment of its lineup to Japan. According to Nikkei Asia, Toyota is considering merging its two Lexus plants in the U.S. into one.
The Japanese automaker currently produces the Lexus ES sedans in Kentucky, while the Lexus TX SUV is assembled in Indiana. However, reports indicate the manufacturer might stop production of the ES once current orders are completed, with the next model to be exported from Japan.
Rivals Take the Other Road
On the other hand, other Asian automakers appear to be taking a different road, even as President Donald Trump’s tariffs on imported vehicles, including from Japan, force automakers to reconsider their manufacturing strategies.
Earlier in the year, Hyundai (HYMLF) disclosed plans to invest $21 billion in the U.S. over the next four years. Tokyo-based Hitachi (HTHIY) also recently launched a $100 million factory in Maryland to produce train cars.
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