Auto suppliers in Japan are confronting a dilemma as the industry pivots away from the combustion engine: Either make the shift too, or find new business.

For 2022, the IHS Markit light-vehicle production forecast was cut by 9.3 percent, or about 8.4 million vehicles.

The $1.3 billion plant will eventually make batteries for as many as 1.2 million hybrid, plug-in hybrid and BEVs per year, the automaker said.

Suppliers representing 90 percent of the automaker's purchasing volume will supply CO2-neutral parts.

Tesla is working with suppliers, including partner Panasonic, on a bigger cylindrical battery cell to increase efficiency and reduct cost. In fact, Tesla is already making some of the 4680 cells on its own.

Toyota Motor North America's announced plans to build a battery plant may require the Japanese automaker to build another assembly plant in the U.S.

Toyota Group megasupplier Aisin is grappling with how and when to shift to a new lineup of electrified products. Profits made from today's internal-combustion vehicles will lead to investment in EV products.

Japan's Envision AESC will invest $2 billion to build a battery-cell and module plant in Kentucky to supply Mercedes-Benz and multiple other automakers.

Huge investments are going into U.S. EV battery production capacity. But that will require upstream parts and materials that are not common to the North American industry.

Two years of disruptions caused by the pandemic, the microchip shortage and a wide range of supply chain challenges are prompting automakers and suppliers to pursue a better sense of where their parts are.