Toyota Motor Corporation (NYSE:TM) shares are trading higher Wednesday following the announcement that its North American division received $4.5 million in federal funding from the U.S. Department of Energy's ARPA-E program. Here's what you need to know.

What To Know: The funding supports a project to develop technology aimed at improving the circular supply chain for electric vehicle (EV) batteries. The project, managed by Toyota's Research Institute of North America, focuses on automating battery disassembly, improving the classification of battery components and extending battery life through recycling and reuse.

Toyota is collaborating with Oak Ridge National Laboratory, National Renewable Energy Laboratory, and Baker Hughes' Waygate Technologies to achieve these goals. The project aims to establish processes for efficient reuse and recycling of EV batteries, reducing waste and emissions.

The project aligns with Toyota's sustainability efforts and the broader industry shift toward cleaner energy. The innovations may enhance the economic and environmental efficiency of EV battery production and recycling.

"This collaboration represents a significant step forward in developing sustainable solutions for the battery lifecycle", said Sarah Kennedy, BLS manager who is leading the technology to market deployment. "By applying the innovations established from this project, we aim to create a framework that not only reduces battery waste but also enhances the circularity of our battery supply chain, supporting Toyota's commitment to sustainability and mobility."

TM Price Action: Toyota Motor Corporation shares were up 0.78% at $174.63 at the time of writing, according to Benzinga Pro.

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Photo courtesy: Toyota Inc.