A step into the unknown

The JPY7 billion (USD44.4 million) investment in Interstellar will be made by the automaker through its subsidiary Woven by Toyota. The move is part of a strategy to expand mass production of rockets, similar to the automotive industry. The companies have been partners for several years, but this was only a personnel deal. The Japanese carmaker will now apply its long-standing experience in car production. In the second round of funding, IST, which already has a number of achievements to its name, including launching its MOMO rockets into space, will receive additional funding and a director from Woven will be appointed to head the company. Toyota's chairman, Akio Toyoda, explained at CES 2025 in Las Vegas that the company sees a future for mobility beyond Earth and is therefore exploring those options as well. In addition, it is also involved in the development of the Lunar Cruiser, a lunar rover that will be sent into space later this decade. It is working with the Japanese Space Agency (JAXA) and the US NASA.

They won't be the only ones in space

This puts Toyota in competition with other car companies, notably Mitsubishi. Its subsidiary has developed H3 rockets for JAXA, which, albeit with delays, have already been launched into orbit. Given the rapid growth of the space sector, Toyota's entry is a signal that it wants to be a key player and follow companies like Elon Musk's SpaceX, which is currently the leader. Jeff Bezos's company Blue Origin also operates space tourism and its plans also include rockets or spacecraft.

Leading space centre

A successful Toyota collaboration would also greatly help the country itself. Not only from an economic and business perspective, but it would support the government's vision of making the country an Asian space hub. Back in 2021, the latter approved a legislative package that includes the construction of new spaceports and satellites, including the possibility of mining space resources. Currently, according to the World Economic Forum (WEF), the local space industry is estimated to be worth about JPY4 trillion (USD26 billion), with an expected increase to JPY8 trillion (USD52 billion) by 2030. Japan already has several successful missions to its credit. Last year, for example, the country was the fifth to land on the moon. Nor can we forget the remarkable progress made by the Japanese company Astroscale, which was the first in the world to safely approach space debris. Government action and regional partnerships will play a key role in maintaining this momentum. In addition, the Japan Space Strategy Fund, through JAXA, will commit JPY 1 trillion (USD 6.6 billion) to the market over the next decade, further boosting the industry. The WEF and McKinsey & Company expect the global space economy to grow to USD 1.8 trillion by 2035, driven by further innovation.

A laboratory for all inventors

Toyota's vision to extend its reach beyond the roads is underlined by the Woven City project. The city is designed for inventors, including companies that want to bring something technologically innovative to the world. The carmaker is participating in it with Woven by Toyota. It is located in the Japanese town of Susono, near Mount Fuji, where the Toyota factory used to be. At the CES 2025 technology trade show, the company announced the completion of the first phase of construction. Originally unveiled at the same event five years ago, the Woven City project represents the company's long-term vision for mobility, combining cutting-edge technology with human-centered design. The project has also been awarded the highest LEED for Communities Platinum certification for its sustainability credentials. The first phase, which is expected to launch later this year, will accommodate approximately 360 residents, primarily Toyota employees and their families, a number that is expected to grow to 2,000 when the project is fully completed, according to PRNews.

Shares after correction

The company's shares have had a period of correction, during which the company's stock market value has fallen from the record high of $255 per share it reached last March to below $170 in August, which was more than a one-year low. In general, however, we can say that they have done reasonably well over the long term. They closed trading on January 8, 2025 at $192.55 per share. And looking at the stock's five-year performance, we can see that they have achieved growth at 47 percent. .* [1]

Toyota Motor's share price performance over the last 5 years. (Source: Investing.com)

* Past performance is no guarantee of future results

[1] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or on the current economic environment, which may change. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied by any forward-looking statements.