Subaru Corp. plans to invest around 250 billion yen ($1.9 billion) on electric-vehicle battery capacity over the next five years and will add an EV production line to its main factory in Gunma prefecture in Japan that should begin producing cars from 2027, the automaker said Thursday.
The new line will involve an investment of around 100 billion yen, the Nikkei reported earlier.
“We’ve been getting a lot more questions from retailers in the US about EVs over the past year,” Subaru Chief Executive Officer Tomomi Nakamura said at a briefing Thursday. “It’s crucial to look closely at how consumers’ values are changing.”
Subaru, which makes almost 70% of its sales in the US, aims to have 40% of new global car sales be electric by 2030. The automaker has started receiving orders for its Solterra model, its first all-electric SUV developed with Toyota Motor Corp. Nakamura said last year that the company plans to “use the alliance to build up technology and know-how.”
Japanese automakers have lagged behind global peers in rolling out electric cars and the country’s EV penetration rate is barely 1%. Now a catch up game of sorts is underway with Honda Motor Co. planning to spend 5 trillion yen over the next decade to make cleaner cars and Toyota investing $624 million to make electric vehicle components in India.
Subaru also reported full-year results on Thursday and forecast operating income for the current fiscal year that will end in March 2023 of 200 billion yen, slightly better than analyst estimates of 196 billion yen.
Fourth-quarter operating profit came in at 13.4 billion yen, up from 4.3 billion yen a year ago but down from the third quarter’s 22.8 billion yen.
The automaker “will likely face risks such as a resurgence of Covid-19 outbreaks, output cuts due to parts shortages, higher input costs and ramifications of the Russia-Ukraine war” this fiscal year, Bloomberg Intelligence analyst Tatsuo Yoshida said.
Subaru shares jumped as much as 9.6%, their biggest intraday gain in 15 months.