Toyota and rival Mazda are expected to announce plans to build a $1.6 billion US assembly plant as part of a new joint venture.
The plant will be capable of producing 300,000 vehicles a year, with production divided between the two carmakers, and will employ about 4,000 people when it opens in 2021, the person said.
A new car plant would be a major boost to US President Donald Trump, who campaigned on promises to increase manufacturing and expand employment for American autoworkers.
It is understood the plant in a yet-to-be-determined US location is expected to build Toyota Corolla cars and a Mazda crossover utility vehicle.
Japan's Nikkei reported yesterday that Toyota would take a roughly 5% stake in Mazda to develop key electric vehicle technologies and jointly build a factory in the United States.
The Japanese carmakers are also believed to be planning future joint efforts on electric vehicles.
Toyota said the two companies have been exploring various areas of collaboration under a May 2015 agreement, and added that the group intended to submit a proposal to its board regarding Mazda.
It did not comment further.
"The industry pace of electrification has really picked up," Toyota Chairman Takeshi Uchiyamada, widely known as the father of the Prius hybrid, said at an event outside Tokyo, declining to comment on the US plant or a Mazda deal.
He defended Toyota against concerns the company has fallen behind its competition on electric cars, citing new technology.
Mazda said in statement that "nothing has been decided yet" and added the company would have a board meeting today. It did not comment further.
"Mazda needs electrification technology. In the past they've poo-pooed EVs, they've felt that they can make internal combustion engines more efficient, but the bottom line is that globally you need to have this technology," said Janet Lewis, head of Asia transportation research at Macquarie Securities.
With an R&D budget of around 140 billion yen (€1.07 billion) this year, a fraction of Toyota's 1 trillion yen, Mazda has said that it lacks the funds to develop electric cars on its own.
Subaru, Japan's smallest major carmaker, also has a partnership with Toyota.
