Informed media reports indicate that Toyota is considering producing the next model of its best-selling RAV4 SUV in the United States, becoming the latest automaker to rethink its supply chains to mitigate the impact of US tariffs on imported vehicles.
Toyota manufactures the current model of the popular SUV in Kentucky, Canada, and Japan. The company originally planned to export the new RAV4 to the United States from Canada and Japan, but is now also considering production in Kentucky as an option, given that demand for the vehicle appears likely to outstrip supply.
Adding US supply would also mitigate the impact of President Donald Trump’s 25% tariff on imported vehicles on the Japanese automaker and avoid potentially high costs in the event of fluctuations in the volatile yen.
Toyota will unveil the refreshed 2026 RAV4 later this year, its first redesign since the 2019 fifth-generation model. It will then be rolled out gradually to various markets around the world. The company has yet to announce the exact timing for its U.S. launch.
According to Reuters, if Toyota goes ahead with its plan to increase production at its Kentucky plant, production there is likely to begin in 2027. Regardless of the Kentucky outcome, Toyota will likely maintain the same level of vehicle production in Canada.
The RAV4 was the best-selling vehicle in the United States last year, surpassing the Ford F-150 pickup truck, which it had held for years.
Toyota sold more than 475,000 RAV4s in the United States last year, representing a fifth of its total vehicle sales there.
It was not immediately clear how many new RAV4s the automaker would produce in the United States. Toyota has 11 factories in the United States, including auto parts plants, and produced approximately 1.3 million vehicles there in 2024, representing more than half of its 2.3 million U.S. vehicle sales.
Trump stated that he is considering amending the auto tax because manufacturers “need some time.” According to Toyota’s data, its total investments in the United States over the years have reached nearly $50 billion.
