Subaru to Build its First Electric Vehicle Factory

Japanese automaker Subaru has decided to build a dedicated electric vehicle (EV) factory in Japan in the late 2020s as part of a $1.9 billion ramp-up to respond to surging demand for battery electric cars in its main North American market.

Subaru, well-known for its Outback crossover, and has long had a strong presence in the United States warned that its U.S. dealers only have a record low stockpile of around 5,000 vehicles left, reflecting the squeeze of a supply-chain crunch. The automaker said it plans to launch a mixed-production line of gasoline and electric vehicles around 2025 before opening an EV-only production line in the new factory after 2027. Other Japanese automakers have yet to formally announce plans to build a dedicated EV factory.

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Japan’s automakers are accelerating their EV production in an attempt to recover ground lost to Chinese EV automakers and particularly Tesla of America which leads the fastest growing segment of the auto industry. Subaru CEO Tomomi Nakamura said “The market for EVs has been changing very rapidly over the past year”, adding that his company plans to invest 250 billion yen ($1.93 billion) over the next 5 years to bolster electrification. The vehicles produced in the new factory would also be exported overseas, Nakamura said.

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However Subaru declined to reveal specifics about production capability and whether it would make EVs for Toyota. Keep in mind Toyota and Subaru had started their partnership back in 2005, which included contract production of Toyota vehicles by Subaru and supply of vehicles to Subaru by Toyota, as well as joint development of the 86 and BRZ. Both automakers also agreed to develop a platform dedicated to battery electric vehicles (BEVs), combining Subaru’s AWD and Toyota’s vehicle electrification technologies.

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Subaru’s announcement to build a new EV factory came on the same day when it began accepting orders for its first mass-produced EV, the Solterra, developed jointly with Toyota in Japan. Subaru outsourced the car’s production to Toyota, which has also just rolled out its first battery electric car– the Solterra’s sibling bZ4X in Japanese domestic market.


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