Toyota Motor has shifted production plans for its three-row electric SUV from Indiana to Kentucky, where it will now build two electric models alongside a partner model from Subaru.
The Japanese automaker said the change was made “to improve manufacturing efficiencies and better serve customers based on market demand.” The move marks a consolidation of Toyota’s electric vehicle (EV) manufacturing operations in the United States as it aims to streamline future production and respond more rapidly to growing demand in the three-row SUV segment.
“As previously announced, Toyota plans to produce two all-new, three-row battery electric SUVs in the US. Toyota will now assemble both vehicles at Toyota Kentucky,” the company said in a statement cited by Automotive News.
Originally, Toyota planned to build one of the three-row EVs in Indiana, where it had invested $1.4 billion in its Princeton plant to support SUV production and integrate battery pack assembly using supplies from its new facility in North Carolina. That investment will now be redirected toward ramping up production of the gas-powered Grand Highlander, which saw U.S. sales rise 50% in 2023.
The strategic realignment comes amid slowing sales for the smaller Highlander SUV, which dropped 62.5% in the first quarter of 2025, while Grand Highlander demand remained steady.
Toyota’s revised EV strategy includes the upcoming U.S. debut of an upgraded bZ electric SUV—formerly known as the bZ4X—featuring improved range, styling enhancements, and compatibility with Tesla’s North American Charging Standard (NACS). The automaker also plans to launch the off-road-capable bZ Woodland and a smaller electric C-HR SUV next year. By mid-2027, Toyota aims to offer at least seven EVs in the U.S. under both the Toyota and Lexus brands.
Meanwhile, Subaru is preparing to launch three EVs by 2026, including the new Trailseeker SUV, which will share components and manufacturing with Toyota under their longstanding collaboration.
Earlier this week, Toyota also announced that price increases would take effect on Toyota and Lexus vehicles built after July 1.