Toyota is finally waking up
Toyota’s been rather sluggish on the transition to EVs, instead taking a slow approach by shifting most of its lineup from combustion engines to hybrid powertrains. Don’t count Toyota out of the game just yet, though – consider the manufacturer a sleeping giant who is finally waking up. After a weak entrance into the electrified segment with the bZ4X, soon to be renamed the bZ, the Japanese automaker is ramping up production with plans to sell seven EVs in the United States by mid-2027.
At least two EVs will be made in the United States
Toyota currently has two all-electric models between its main and premium Lexus brands. The Toyota bZ4X, renamed to bZ for the 2026 model year, receives several major updates that make it more attractive, including a 314-mile range. The 2026 Lexus RZ follows suit, with improved performance and up to 300 miles of range on a single charge. Toyota also announced that the C-HR will arrive sometime in 2026, presumably for the 2027 model year, and offer a 290-mile range.
Production of two new EVs will begin at its American manufacturing facilities in 2026, while three others will be imported. According to executives, the Japanese automaker expects slow but steady growth in the EV segment. If there’s a surplus for American-made EVs, Toyota will export that surplus to overseas markets with faster EV adoption rates.
“We’ll sell a little bit more every year and grow with the market,” Cooper Ericksen, a senior vice president of planning and strategy at Toyota Motor North America, told Bloomberg. “But we have to think about how many Canada will use, how many the US will use, and we can then export to other global destinations.”
Toyota previously pledged to offer an electrified version of every nameplate on its global lineup. To date, approximately 80% of Toyota and Lexus models are available with hybrid or all-electric powertrains. Most recently, Toyota announced that the 2026 RAV4 will come with hybrid-only powertrains.
Toyota’s U.S. battery production prepares to come online
Toyota plans to manufacture at least two new EVs in the United States, but their production efforts don’t end there. The Japanese automaker has plans to begin producing and shipping lithium-ion batteries from its US facility later this year. The battery plant spans more than 1,850 acres in Liberty, North Carolina. Once fully operational, the facility will have 14 lines producing batteries. Of those, four will manufacture hybrid batteries, while the other 10 will supply batteries for the two American-made EVs.
The first hybrid battery line is expected to start production in June, with the rest beginning operations through 2034. Once all 14 lines are running, the production facility will produce up to 30 gigawatt hours, the equivalent of 800,000 hybrid, 150,000 plug-in hybrid, and 300,000 EV batteries.
Toyota sold less than 30,000 EVs in 2024, during which US EV sales rose 7.3% to 1.3 million. That isn’t surprising, considering the automaker has been fairly outspoken regarding government policy towards EV adoption. Instead of using incentives to speed up EV sales, such as the $7,500 tax credit, Toyota executives indicated that governmental bodies should allow the EV segment to grow organically.
“The whole EV ecosystem is ahead of the consumer,” said Jack Hollis, COO of Toyota North America, in November 2024 regarding emissions regulations. “It’s not in alignment with consumers. It’s just not.”
Even so, the Japanese automaker expects EV market share to double over the next five years. According to Cox Automotive, EV sales made up 8.1% of total vehicle sales in 2024. Currently, competitors like Tesla and Hyundai are dominating US EV sales. While all-electric vehicles might not be a major seller for Toyota now, executives aren’t willing to cede the segment to competing manufacturers.
Tariffs aside, it looks like Toyota has a solid plan to become a true competitor in the EV segment. Considering the original bZ4X crossover was met with mixed reactions thanks to its slow charging speed, lackluster performance, and disappointing range, Toyota’s upcoming EVs are a breath of fresh air. The updated bZ and RZ seem promising enough, and the upcoming C-HR looks like a stylish addition to the all-electric lineup. If the pricing is right, Toyota could very well overtake General Motors and Hyundai within a few years. Frankly, I wouldn’t be surprised if the Japanese manufacturer manages to topple Tesla, too.
