Mazda and Toyota's $1.6 Billion Manufacturing Plant to be Built in Alabama: Report

The two automakers are singing Sweet Home Alabama while raking in tax incentives thanks to a new deal.

Toyota And Mazda Announce Electric Vehicle Partnership
Tomohiro Ohsumi—Getty Images

Mazda and Toyota are both committed to building an even larger electrified footprint in the United States during the coming years. Back in August, the two automakers announced a partnership which would result in a shared $1.6 billion investment for the two companies: A new plant based in the United States. It appears that sources are confirming that its final resting place has been picked, and according to Reuters, Alabama has won the prize ribbon.

The decision to build near Huntsville, Alabama ousted five other plants, including Illinois, Mississippi, South Carolina, Tennessee, and Texas, likely due to an already systemic approach to manufacturing in the nearby regions. 

Toyota has a large network of parts suppliers and even an engine factory nearby, making Alabama one of the more ideal sites for production to occur. The state reportedly offered the automakers an incentive package valued around $370 million, which included both reduced taxes, as well as investment rebates. 

There is reportedly another localized incentive package that has yet to be announced. Coupled with the cheap labor and reduced presence of the United Auto Workers union, it's no wonder that the pact chose the "sweet home" state.

Currently, Mazda has manufacturing operations in Japan, Malaysia, Mexico, Thailand, and elsewhere in the world. However, the automaker has no current production stake in the United States, and with this venture, it will effectively be planting its feet in American soil for the first time since 2011 when Mazda and Ford all but dissolved partnerships. 

With Toyota already having a number of manufacturing facilities stateside, this gives Mazda a solid foundation in a time when importing vehicles produced outside of the U.S. could become more expensive due to proposed border tariffs.

The decision to build the plant in the United States is likely part of a larger indication that automotive manufacturing is headed back to the United States. Companies like BMW, GM, and even Volvo announced that production based in the U.S. would be increasing rather than building some models overseas. Additionally, the new plant will likely provide employment for as many as 4,000 workers.

Beginning production in 2021, it is estimated that the new plant will produce about 300,000 vehicles annually, pumping out a large number of America's favorite type of vehicles, the crossover

According to ABC, the Toyota Corolla will be manufacturer at this plant alongside Mazda's "new small SUV." No word whether the plant will be exclusive to gasoline or electric has been made at this time, though given its proximity to the Toyota engine plant in Huntsville, there is a good possibility that some, if not all, vehicles will be gasoline-powered. However, this possibility remains that a number of assembled vehicles produced at the plant could be electrified thanks to the partnership, though some things like battery technology are expected to remain proprietary between the two manufacturers.