The world's largest carmaker by volume also announced plans to build a new company and establish a U.S. automotive battery plant together with Toyota Tsusho, the automakers metal trading arm and a unit of the Toyota Group.
The funds are part of the $13.5 billion it announced in September that it planned to spend globally by 2030 to develop batteries and its battery supply system. The largest Japanese automaker said in September it aimed to slash prices of its batteries by working on materials used and the way the cells are structured.
Toyota said the new company will initially focus on producing batteries for hybrid vehicles. Toyota said it will later disclose production capacity, the new company's structure and the plant site.
Ted Ogawa, the CEO of Toyota North America, said in a statement that this investment will help usher in more affordable electrified vehicles for U.S. consumers. Automobile makers around the world are investing billions of dollars to ramp up battery and electric vehicle production as they face increasingly stringent environmental regulations.
Toyota has mounted a lobbying campaign to try to convince U.S. lawmakers not to include an additional $4,500 tax incentive for union-made electric vehicles in their legislative budgets.
In August, the U.S. President Joe Biden signed an executive order setting a target to make half of all new vehicles sold zero-emissions vehicles in 2030.
Detroit's Big Three automakers said in August they aspire to achieve sales of 40 - 50% of annual U.S. electric vehicles with the original goal of becoming the largest producer. Last month Toyota said it unreservedly signed up to meet the challenge of 50% of the vehicles we sell electric by 2030.
Biden's 2020 goal and the automakers 2030 goals include battery electric, fuel cell and plug-in hybrid vehicles that also have a gasoline engine.