Japanese automaker Toyota said it will invest $328 million to produce a new hybrid model of its popular Tacoma pickup truck in Mexico.

The company plans to expand its factory in the central Mexican city of Guanajuato, where Toyota already produces its Tacoma truck line for the North American market. 

“Toyota has informed us of an investment of $328 million in their Guanajuato plant for the adaptation of their lines to produce a new generation of Tacoma for the North American market, which will be hybrid electric,” Diego Sinhue Rodriguez Vallejo, governor of the Mexican state of Guanajuato, posted on Twitter.

Rodriguez Vallejo was meeting with Toyota officials during a tour of Japan last week.

“We will start preparing the new generation of Tacomas in Guanajuato and we are very, very excited that this plant is going to play a very important role in Toyota’s manufacturing in North America,” said Luis Lozano, president of Toyota Mexico.

The expansion will add 2,500 jobs to the Guanajuato factory, which already employs about 1,700 workers. 

The Tacoma hybrid is set to begin production and go on sale by the end of the year.

Toyota’s plant in Guanajuato opened in December 2019, with capacity to produce up to 100,000 Tacomas annually. Over the past three years, Toyota has invested $1.2 billion in the plant.

The Guanajuato plant is about 600 miles from the U.S.-Mexico border crossing at Laredo, Texas.

Mexico is developing into a key manufacturing hub for electric and hybrid vehicles, which are mainly exported to the United States. 

General Motors, Ford Motor Co., BMW and Audi are already producing EVs in the country or plan to, while Tesla is building a $5 billion electric vehicle factory in the Mexican city of Monterrey.

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