TOKYO — Toyota is tightening control over critical battery production as it readies the ramp-up of next-generation electric vehicles in Japan for worldwide export.
Toyota is buying out longtime partner Panasonic for full ownership of their 28-year-old battery-making joint venture, Primearth EV Energy Co.
The move comes as Primearth, one of Toyota's earliest suppliers of batteries for such hybrid vehicles as the Prius, gears up to start pumping out batteries for full-electric vehicles in Japan.
Toyota traditionally likes close oversight, if not outright control, over key components. Bringing Primearth fully in-house allows more flexibility in deciding output levels, cost and battery technology.
Primearth, which was established in 1996 as a 40-60 joint venture between Toyota Motor Corp. and Panasonic Holdings Corp., has focused only on power packs for standard and plug-in hybrids.
From 2026, it will start making batteries for EVs at a new factory in its Kosai battery hub in Shizuoka prefecture, between Nagoya and Tokyo. The new Arai battery plant, the company's fourth, opens this year. It will first make hybrid batteries and then add plug-in hybrid and EV batteries.
"We wanted [Primearth] to take on the manufacturing of a wider range of electric vehicle batteries," a Toyota spokesman said. "With this major change, we also considered the capital structure."
Headquartered in Kosai city, Primearth already has two factories at the battery complex there, its Omori and Sakaijuku plants. Kosai is also the birthplace of Toyota Group founder Sakichi Toyoda.
The company's other Japanese plant is in Miyagi prefecture, north of Tokyo.
It also has two battery-making affiliates in China.
Over the years, Toyota has whittled away Panasonic's majority share in Primearth. In 2006, the stakes flip-flopped with Toyota owning 60 percent and Panasonic having 40 percent. Four years later, the carmaker upped its stake to its current level, 80.5 percent, leaving the rest to Panasonic.
Toyota currently sources hybrid batteries from Primearth and from Japanese suppliers Toyota Industries Corp. and Prime Planet Energy & Solutions Inc.
Prime Planet Energy is another Toyota-Pansonic joint venture. Toyota owns 51 percent, Panasonic 49 percent.
Toyota gets its EV batteries from Prime Planet Energy, China's CATL and BYD, and South Korea's LG.
Toyota said its purchase of Panasonic's stake in Primearth should be completed in late March. It did not disclose a transaction price. Toyota is considering a name change for the company.
Primearth employs about 4,700 people.