Toyota set to construct $3.6 billion expansion in San Antonio

By Robert Matteson
The Center Square

Toyota announced that it will invest in a $3.6 billion expansion at its San Antonio manufacturing campus, creating 2,000 new high-quality jobs.

The investment will add a second vehicle assembly line, create jobs and add 2.5 million square feet to Toyota Texas in the next four years, according to a press release from Toyota on Monday.

Toyota will transition the production of the Tacoma truck from Toyota Motor Manufacturing Baja California located in Tijuana, Mexico, to Toyota Texas in San Antonio over the next four years. Toyota will continue to assemble the Tacoma in Guanajuato, Mexico as well, according to Melinda Louden, spokesperson for Toyota.

The San Antonio plant is already the exclusive home of the Tundra and Sequoia.

While speaking in Ankara, Turkey at the NATO summit on Tuesday, President Donald Trump cited Toyota’s investment in San Antonio as part of $19.2 trillion in total investment being invested in the United States, in a 12-month period. He claimed this is a world record.

“Toyota is moving out of Mexico into the United States and building one of the biggest truck and car plants ever built. It’s amazing. That’s what tariffs do, if properly used,” Trump said. “We’ve never had a more exceptional economy or potential economy. There’s never been anything like it. Under the last administration, they did much less than a trillion dollars of investment coming in, and we’re at $19.2 trillion in actually the first 12 months.”

“No president has done more to revive the American auto industry than President Trump, and Toyota’s recent investment announcement is one of many being driven by the Trump administration’s agenda of tariffs, deregulation, and tax cuts,” White House spokesman Kush Desai told The Center Square, answering questions by email. “American hands and minds will build a new Golden Age for American Automaking.”

Toyota broke ground in San Antonio in 2003 for its initial 2.2 million square foot manufacturing facility and began producing in 2006, according to a press release from Gov. Greg Abbott. The latest expansion is set to more than double the current manufacturing facility.

“Texas is where the world builds bigger, and Toyota shows it once more with a $3.6 billion expansion in San Antonio that doubles their factory footprint and creates 2,000 new jobs,” Abbott said. “This Texas-sized investment reflects the strength of our workforce and the unmatched business advantages found only in our state. Supported by the Texas Enterprise Fund and JETI program, this expansion will deliver economic opportunities to generations of San Antonio families and further cement Texas as the premier destination for world-class advanced manufacturing.”

The expansion increases Toyota’s total investment to $8.3 billion in San Antonio.

Toyota will employ approximately 6,100 people, and 23 on-site suppliers will employ 5,600 additional people in San Antonio. In addition, Toyota Motor North America is headquartered in Texas and employs 6,600 people at its $1 billion campus in Plano.

Toyota will receive a Texas Enterprise Fund grant worth $20 million because of its expansion in San Antonio, Abbott announced. The TEF grant is awarded to companies that are choosing between Texas and out-of-state sites to begin new projects.

On June 18, the San Antonio City Council voted to unanimously pass an incentive package of city support for Toyota valued at approximately $122 million. The incentive package includes a 10-year tax abatement, valued at $88 million. The package also includes grants and fee waivers. Additional incentives from San Antonio Water Service and CPS energy brought the total value of incentives to approximately $189 million.

The incentive package presented to Toyota has caught the attention of some economists such as an Austin area-based executive with Ginn Economic Consulting, a company that advises businesses and organizations.

“Toyota’s reported $3.6 billion investment and 2,000 new jobs are great news for Texas,” Vance Ginn, president and founder of Ginn Economic Consulting, told The Center Square, answering questions by email. “More private investment, production and employment are always welcome. But I oppose the targeted incentive package. Texas should compete with low taxes, limited government and economic freedom for everyone, not special deals for a few,”

Ginn argued that the government should not “pick winners and losers with taxpayer resources.”

“Taxpayers always pay for corporate welfare. Government has no money of its own,” Ginn said. “Every subsidy, grant, infrastructure project, or tax abatement redistributes taxpayer resources or forgoes revenue that could have supported broad-based tax relief. The opportunity cost is real, and existing businesses that don’t receive special treatment are placed at a competitive disadvantage.”

According to Ginn, Toyota’s investment in Texas is good news for the state, but presents an additional question that ought to be addressed.

“I’m glad Toyota is investing in Texas,” Ginn said. “But policymakers should ask a broader question: If government spending continues growing and taxes eventually have to rise to pay for it, how long will companies want to stay? Lasting prosperity comes from broad-based policies that keep taxes low and government limited, not from temporary subsidies for select firms.”

The Center Square reached out to San Antonio Mayor Gina Ortiz Jones to request an interview but did not hear back by the time of publication.