Toyota shares at last check were off slightly to $184.45. They closed up 1.2% in the previous session.
The new plant will be located in Liberty, near Greensboro, N.C., and is slated to come online in 2025.
The move is expected to create 1,750 new jobs, with an expected average yearly salary of $62,000. Randolph County, where Liberty is located, has an average annual salary of just under $38,000, according to local news media.
The facility will have four production lines, each capable of delivering enough lithium-ion batteries for 200,000 vehicles. The automaker intends to expand the operation to at least six production lines for a combined total of up to 1.2 million vehicles per year.
The company said it is committed to using 100% renewable energy at the new facility to produce the batteries as part of its continuing effort to reach carbon neutrality for its vehicles and operations by 2050.
The $1.29 billion investment made by Toyota and Toyota Tsusho is funded partly from a total investment of about $3.4 billion, which was unveiled on Oct. 18.
In September, Toyota said that it expected to spend more than $13.5 billion by 2030 to develop batteries and its battery supply system.
Toyota is developing technology to mass produce solid-state batteries, which could potentially jump-start the EV industry because they are more energy dense, charge faster and are less prone to catching fire, Reuters reported at the time.
"Today marks the beginning of a mutually beneficial partnership with the Tar Heel state as we embark on our journey to achieve carbon neutrality and provide mobility for all," Ted Ogawa, chief executive of Toyota Motor North America, said in a statement.