On the Dash:
- Toyota plans to introduce seven EV models in the U.S. by 2027, demonstrating a long-term commitment to the segment.t
- Toyota’s EV sales remain volatile, with market share dropping from 10.5% to 5.8% despite recent model momentum
- Hybrid demand continues to outpace supply, accounting for 55% of March sales and driving dealer profitability
Toyota is moving forward with plans to expand its battery-electric vehicle lineup in the U.S., even as demand softens and competitors pull back from the segment.
The automaker currently offers four imported EVs and will add a fifth this month. Production of a new U.S.-made EV will begin later this year at its Kentucky plant, followed by another model in 2027, bringing its total lineup to seven.
The push comes as EV demand declined after federal tax credits and subsidies were withdrawn last year. EVs accounted for 10.5% of U.S. new car sales in the third quarter of last year but fell to 5.8% by the end of 2025, according to Cox Automotive.
Toyota executives said they expect demand to recover gradually, supported by rising fuel costs linked to geopolitical tensions and growing consumer interest in electrified vehicles. The strategy also builds on the company’s strength in hybrids as it seeks to expand its presence in the EV market.
While competitors such as GM and Ford have scaled back their EV plans, and Honda has canceled three U.S.-built EVs and warned of a ¥2.5 trillion loss, Toyota continues to invest in its EV initiatives. The company plans to spend $10 billion on U.S. manufacturing over the next five years, including production of a three-row electric SUV in Kentucky and battery supply from a $14 billion North Carolina plant.
Notably, sales of the bZ and Lexus RZ have more than doubled last month, while the bZ outperformed the Prius in sales for the first three months of the year. Additionally, dealers report improved profitability on EV sales following prior losses.
However, hybrids remain Toyota’s core focus as electrified vehicles accounted for 55% of U.S. sales in March, up from 49% a year earlier, with supply constraints limiting further growth.
