08/04/2011 08:03 EDT | Updated 10/05/2011 05:12 EDT

Toyota Woodstock Plant To Assemble Electric Version Of RAV4


WOODSTOCK, Ont. - They're not saying how much it will cost or how many will be made initially, but Toyota officials confirmed Friday the company will build the electric version of its popular RAV4 sport utility vehicle in Woodstock.

"Today we are making history with the new RAV4 EV," said a beaming Ray Tanguay, chairman of Toyota Motor Manufacturing Canada, outside the company's sprawling plant, which already makes the conventional version of the RAV4.

The project is a joint venture with Tesla Motors Inc. of Palo Alto, Calif., which will provide the batteries and other powertrain components.

Assembling the vehicle at the southwestern Ontario plant, which produced 151,000 conventional RAV4s last year, was "only natural," said Tanguay.

"Obviously we’re trying to ensure the quality of the RAV4 EV will be integrated in our processes, all the same functional tests to make sure that our vehicle is of the highest quality," he said.

"If it would be built in a separate assembly (plant) that has no experience with building the RAV, I think it would be much higher risk, and this just makes good common sense."

There had been speculation the RAV4 EV would be assembled at a former Toyota-General Motors plant in California owned by Tesla.

The company credited $141.6 million in grants and loans from the Canadian and Ontario governments — the province's was a grant — for its decision to build the electric version of the small SUV in Woodstock.

"With the supports from the federal and provincial governments, it helped us to attract this kind of investment," said Tanguay.

The RAV4 EV production is part of Toyota's $500-million "project green light," which includes upgrades to the Woodstock plant and another one in nearby Cambridge, Ont.

Toyota also praised the Ontario government for offering incentives of up to $8,500 to buyers of electric vehicles and its commitment to green technologies, saying such policies help keep companies looking to the future.

"To be in a leading edge technology and bring products that maybe have a bright future, is always good for any company to be in," said Tanguay.

Toyota hasn't set the price yet for the RAV4 EV, which will go on sale next year, and isn't saying how many jobs, if any, will be created in Woodstock because of the new model.

"We’re not disclosing the number of jobs at this time," said Toyota Canada President Brian Krinock. "What we are doing is ensuring future success and longevity of the automotive sector in Canada."

The Ontario government said project green light will help protect 6,500 jobs and thousands of supplier jobs in the province.

The company also isn't saying how many RAV4 EVs it plans to produce next year.

"We believe the market is still uncertain, so based on market demand at the beginning it will be a limited volume because of uncertainty of where market acceptance will be," said Krinock.

Toyota will pay Tesla $100 million to supply the battery, motor, gear box and power electronics for the RAV4 EV. Tesla will build the electric powertrains at its production facility in California and then ship them to Woodstock for final assembly.

The Ontario government wants to have one out of 20 vehicles in the province electrically powered by 2020, and is working to create a hub of manufacturers that can export green technology products around the world.

"Our job is to be out front, understanding where the world is going to go, be there first and be sure we develop the capacity both from a research perspective, and a manufacturing and service perspective, so that we can supply that growing demand," said Ontario Premier Dalton McGuinty, who attended Friday's announcement.