Toyota Motor Corporation is accelerating its electric vehicle (EV) strategy in the United States, expanding its battery electric lineup even as several competitors reduce investment in the segment.
The automaker currently offers four imported EV models in the U.S. and is set to introduce a fifth this month. Production of its first U.S.-manufactured EV will begin later this year at its Kentucky facility, with an additional model scheduled for 2027. This will bring Toyota’s total EV lineup in the U.S. to seven models.
The expansion comes at a time of mixed market conditions. EV adoption in the U.S. declined after the removal of federal tax credits and subsidies, with EVs accounting for 5.8% of new vehicle sales at the end of 2025, down from a peak of 10.5% in the previous year. Despite this, Toyota expects demand to recover as fuel price volatility and broader consumer awareness drive interest in electric mobility.
Toyota’s approach contrasts with competitors such as Honda Motor Co., which recently canceled several U.S.-based EV projects, as well as General Motors and Ford Motor Company, both of which have scaled back EV production plans. Even Tesla has adjusted its lineup, signaling a broader recalibration across the sector.
Toyota is positioning its EV growth as an extension of its long-standing leadership in hybrid vehicles. Electrified models, primarily hybrids, accounted for 55% of Toyota’s U.S. sales in March, up from 49% a year earlier. However, supply constraints have limited availability, with some hybrid models facing extended wait times.
“We’re coming into the marketplace with multiple options for our customers at a time when people are looking for new options,” said Mark Templin, executive vice president and chief operating officer of Toyota’s North American operations. “If we get 15% of the overall market, we should be able to get 15% of the BEV market.”
Recent performance suggests early traction in Toyota’s EV portfolio. Sales of the bZ and Lexus RZ models more than doubled in the latest reporting period, with the bZ outperforming the Prius in U.S. sales during the first quarter of 2026. The company has also introduced additional models, including the C-HR EV and the bZ Woodland SUV, while expanding its Lexus EV offerings.
Toyota’s upcoming U.S.-built EV will be a fully electric version of the Highlander, a three-row SUV, produced at its Georgetown, Kentucky plant. The vehicle will be powered by batteries supplied from the company’s $14 billion lithium-ion battery facility in North Carolina, part of a broader $10 billion investment plan in U.S. manufacturing over the next five years.
The company’s multi-pathway strategy—combining hybrids, plug-in hybrids and battery electric vehicles—continues to shape its long-term positioning. While EV demand remains uncertain, Toyota is leveraging its manufacturing scale and hybrid dominance to establish a stronger foothold in the U.S. electric vehicle market.
