Last November, Toyota opened a massive $13.9 billion lithium ion battery plant in Liberty, a small Randolph County town of a few thousand people southeast of Greensboro. It is the company’s first battery factory anywhere outside Japan, its single largest manufacturing investment ever, and already one of the biggest manufacturing operations in the state of North Carolina. Over the 2,000 acres of the Liberty plant, 3,000 North Carolinians are now employed in technically sophisticated manufacturing roles, and the project is on-track for an expected staff of 5,000 at full build-out. What the plant mostly makes is itself a sign of North Carolina’s future: batteries for hybrid and electric vehicles.
North Carolina’s roadways are in the midst of a major structural shift away from gasoline and towards electric power. According to new vehicle-registration data from the state Department of Transportation, the state crossed a symbolic but nevertheless important threshold in August of 2025: for the first time, traditional gasoline cars fell below 90% of the entire statewide vehicle fleet. That trend has continued - as of May of 2026, they are now 89.1% and continuing to fall.
In North Carolina, like in America generally, the internal combustion-based, gasoline-powered car has peaked and is now in slow decline. In its place, forms of electrified vehicles - pure electric vehicles (EVs), plug-in hybrids, and conventional hybrids - are taking its place. This shift is unmistakable on our roads and could present a major economic opportunity to North Carolina - if its leaders are able to seize it.
No stopping the electric car
As we’ve written about before, the shift towards electrified vehicles is led by strong consumer demand. North Carolina has seen steady, almost unbroken growth in demand for hybrid and pure EV cars since tracking data became available:
In this graph, one can plainly see the effect of the cancellation of tax credits for EVs, which the Trump administration and Republicans in Congress passed as a part of 2025’s “One Big Beautiful Bill” act. This had the effect of blunting demand in Q4 of 2025, as demand was pulled forward, but sales began taking off again in Q2 of 2026, resuming their earlier pattern.
As the whole class of alternative vehicles (EVs, plug-in hybrids and pure hybrids) has grown, they have steadily become a larger share of the entire North Carolina vehicle fleet. Today, that share is still relatively small overall. All alternatives as a class represented only 5.8% of the entire vehicle fleet in May of 2026. Yet in April of 2025, they represented 4.5% of the fleet. In 12 months, alternatives grew their share of the North Carolina vehicle market by 27%. In absolute terms, there were about 110,000 more alternative vehicles on the road, and almost the same fewer gas cars.
Virtually all net-new growth on North Carolina’s roadways are coming from alternative fuel cars, and their share of the fleet is accelerating.
The economics of EVs are shifting
In July of 2025, President Trump signed his signature “One Big Beautiful” tax law that ended the federal credit for new electric and plug-in vehicles, worth up to $7,500, by September 30th of that year. The effect was real, but brief: buyers rushed to beat the deadline, and analysts expected the segment to stall in the following months. That plainly did occur - yet within a couple of months, the trend had reasserted itself, and the whole segment continued to grow.
This pattern undermines a key criticism of EVs and the plug-in automotive segment, namely that it was some kind of a top-down, government-mandated market. What the continued (and indeed, accelerating) alternatives market shows is that a subsidy can move a market at the margin, but plainly did not set the direction for the segment as a whole. Electrified vehicles are the future of the automotive industry because of observable consumer demand, not public policy.
The winners of the retooling
The more consequential question for North Carolina is not so much who buys these vehicles, but who builds them. The industry’s shift is redrawing the map of American advanced manufacturing, and the Southeast - the emerging “Battery Belt” - is claiming an outsized share of it. North Carolina is on that map, and deserves a bigger piece of the pie.
North Carolina has pursued a major auto manufacturing plant since the 1990s, and watched the prize go elsewhere nearly every time: Mercedes, BMW, and Volvo to South Carolina; Nissan and Volkswagen to Tennessee; Kia to Georgia; Honda, Hyundai, and, in 2018, the Toyota-Mazda assembly plant to Alabama. Vehicle assembly anchors an unusually dense network of parts suppliers and service firms - Alabama’s plants now underwrite tens of thousands of automotive and supplier jobs - and the job multipliers that invite skepticism in other economic-impact claims are, for auto manufacturing, largely real. A prize that large is worth a long pursuit, and sometimes, a gamble.
North Carolina has now won one of those gambles and lost another. While the VinFast plant in Chatham county now seems to have fizzled, the Toyota battery plant in Randolph county has taken root. At full capacity, ten of the factory’s fourteen lines are meant for electric and plug-in batteries and four for hybrids - a clear statement about where Toyota sees its future going. Properly structured, economic development programs to draw major industrial projects such as these can maximize jobs and investment coming to North Carolina while minimizing (though never eliminating) potential downside to the taxpayers.
