In response to U.S. tariffs currently in place on imported vehicles, Toyota is reportedly considering bumping up production of the next generation of its RAV4 SUV model in its American assembly plants – and that could mean reducing it elsewhere.
The RAV4 is the Japanese automaker’s best-selling model, of course, so this is a potentially significant move if it happens.
Reuters reported the news, citing three people close to the matter who asked not to be identified. Toyota has said nothing official regarding any production schedule adjustments, and given the erratic decision-making in the White House, any plans it may be making are subject to change at any moment.
The current situation
Currently, the RAV4 is manufactured in Kentucky in the U.S., but also in Canada, Mexico and Japan. Initially, the company planned to export the new 2026 RAV4 to the U.S. from plants in Canada and Japan, but it’s now reportedly considering producing RAV4s destined for the American market at its Kentucky plant.
One catch with that plan? The Kentucky plant doesn’t have capacity to meet demand for the model. Last year alone, Toyota sold 475,000 RAV4s in the United States, which represents 20 percent of all its American sales.
And Canada?
Obviously, since Toyota has had a significant and established presence in Canada for more than 60 years now, the possibility of moving production south of the border is concerning, especially of the popular RAV4.
One of Reuters’ sources did say that Toyota would not reduce the total number of vehicles it produces in Canada annually.
Toyota told Reuters that it is constantly studying ways to improve production in order to better serve its customers and offer stable jobs to employees.
"We have nothing to announce at this time and we will not comment on speculation," the company said in regard to possibly boosting RAV4 production in Kentucky.
Toyota is a cautious company and is very unlikely to make any rash decisions. What’s more, it would be irresponsible for it not to study the various possibilities and different scenarios should the tariffs and counter-tariffs remain in place.
Toyota currently has 11 plants in the United States, including parts factories. It assembled 1.3 million vehicles stateside in 2024, more than half of the 2.3 million vehicles it sold in the U.S. that year.
Toyota claims its total investment in the U.S. over the years has amounted to nearly $50 billion USD.