The plant would be the first EV factory built from scratch in Japan, with the total investment expected to exceed US$770 million. It will initially produce several tens of thousands of cars a year.

The plant will be located near the automaker’s main factory and other facilities in Ota, Gunma Prefecture. In addition to construction of the new facility, the existing plant will be retooled to produce some EVs.

Subaru has been slow to shift to electric vehicles and its lineup includes a higher share of gasoline-powered cars than other big automakers. The company hopes the new plant will provide a major boost to its EV production.

Subaru began taking orders on May 12 for the company’s first EV to be sold worldwide, the Solterra, whose chassis was jointly developed with Toyota Motor.

However, the company outsources production of the car to Toyota’s Motomachi Plant in Aichi Prefecture. It does not currently make its own EVs. Subaru currently turns out 700,000 cars annually, mostly gasoline-powered vehicles. It also sells a smaller proportion of hybrid vehicles than its competitors.

Subaru hopes to increase the share of its EV and hybrid sales to over 40% of the total by 2030. The company will also consider having the new plant make EVs for Toyota and other companies.

Major global automakers have all announced plans to shift to EVs.

Honda said it would halt sales of gasoline-powered vehicles and revealed plans to build new production lines dedicated to EVs in China and North America. Germany’s Volkswagen announced the construction of a new plant in Germany dedicated to EVs.

General Motors has also built an EV plant in the US. Nissan Motor will also renovate its gasoline vehicle plant in the U.S. to make EVs, starting operations in 2025.

LMC Automotive, a UK-based research specialist, forecasts global EV sales in 2030 at 35.44 million vehicles, 7.6 times higher than in 2021. The shift to EVs is expected to proceed rapidly in the world’s major car markets, including China, Europe and the U.S.