For many years, Japan has built a strong and efficient car-focused growth corridor that runs through Kentucky and Alabama, attracted by the excellent infrastructure, highly skilled workforce and economic incentives offered by the two Southern states.
Today, Japan’s automotive giants are stepping up their investments and making a committed transition toward electric vehicles, thanks to the continued support and commitment shown by the leaders of Kentucky and Alabama.
Strong pivot toward electric vehicles
With around 200 Japanese-owned facilities employing about 47,000 people statewide, Kentucky has remained a preferred destination for Japanese investment, according to the Kentucky Cabinet for Economic Development.
In the northern city of Georgetown, Toyota expanded its year-old current electrification plan in early 2024 with a $1.3 billion investment to support the manufacturing of an all-new, three-row electric SUV, along with battery pack assembly.
“Thank you, Toyota for yet another $1 billion-plus investment coming to Kentucky,” said Gov. Andy Beshear upon the announcement made by the KCED.
The expansion reinforces the state’s ambitions to remain a leader in EV production in the United States.
State officials stress that workforce development was central in keeping the investment pipeline flowing.
“The workforce piece of the equation was critical. We benchmarked ourselves against the best,” said Kristina Slattery, KCED’s business development commissioner.
Kentucky complements its economic development efforts through diplomacy. In July 2024, Beshear led a trade mission to Japan and South Korea to meet with existing and prospective investors, expressing that the state is committed to its Japanese partnerships and ready for the transition to EVs.
Toyota and Mazda take the wheel
In Alabama, Japanese partnerships are equally durable. The Mazda Toyota Manufacturing facility in Huntsville is a joint venture that employs up to 4,000 people and is capable of producing 300,000 vehicles a year.
Around 90 Japanese companies operate statewide, with nearly $10 billion invested since 1999, according to the Alabama Department of Commerce.
The Japan-Alabama partnership continues to expand. In June 2024, Toyota Alabama announced a $282 million expansion of its Huntsville powertrain operations, creating 350 jobs.
“This new investment project will build on the great legacy of Toyota’s Alabama engine plant and create even more new opportunities,” said Gov. Kay Ivey.
Alabama Commerce Secretary Ellen McNair added that the project “will once again help power Toyota’s strategic efforts to prepare for the future in a fast-changing industry.”
Like Kentucky, Alabama also actively promotes diplomatic ties with Japan.
During the 45th Southeast U.S.-Japan meeting in Tokyo in 2023, then-Commerce Secretary Greg Canfield emphasized that the “long-standing partnership between Japan and Alabama continues to spark economic growth, create opportunity and foster deep friendships.”
How Japanese investors will benefit
Kentucky offers an EV-oriented production base, from Toyota’s battery EV program in Georgetown to the broader “battery belt” developing across the state, while Alabama pairs large-scale vehicle assembly at Mazda Toyota Manufacturing U.S.A. Inc. with sustained reinvestment and consistent Japan-focused outreach.
For market entrants or expanders from Japan, the message from the leaders of both states is clear: Our workforce, supplier density and long-term policy support are already in place.
