Automotive giant Toyota announced today plans to invest approximately $5.2 billion to increase its EV battery production capacity in the U.S. and Japan, citing growing demand for battery electric vehicles.

The announcement marks the second multi-billion dollar EV battery announcement this week, with Honda revealing plans as well to invest $4.4 billion in a new U.S.-based battery plant with partner LG Energy Solution.

The new investments form part of a rapidly expanding EV and battery production ecosystem, as major automakers ramp investments to meet growing demand for electric vehicles, and government-imposed deadlines to shift to zero-emission vehicles (ZEVs), such as the Biden administration’s goal for ZEVs to make up half of new vehicle sales in the U.S. by 2030, and last week’s approval in California of plans to require all new car, pickup truck and SUV sales in the state to be ZEVs by 2035.

Toyota’s newly announced investments are anticipated to increase the company’s battery production capacity in Japan and the U.S. by up to 40 GWh. The company plans to invest approximately 400 billion yen (USD$2.9 billion) in the Himeji Plant of Prime Planet Energy & Solutions and other plants and properties in Japan, and 324 billion yen (USD$2.3 billion) in Toyota Battery Manufacturing, North Carolina.

In a statement announcing the new investments, Toyota said:

“Toyota believes that there is more than one option for achieving carbon neutrality. It also believes that the means of reducing CO2 emissions as much as possible and as quickly as possible while protecting the livelihoods of its customers vary greatly depending on the country and region. With such in mind, Toyota will continue to make every effort to flexibly meet the needs of its various customers in all countries and regions by offering multiple powertrains and providing as many options as possible.”

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