Toyota Motor Corporation has decided to delay the production of electric vehicles (EVs) in North America to the first half of 2026, as reported by Nikkei, in response to a slowdown in sales within the critical U.S. automotive market.
Originally, Toyota had planned to begin assembling a new three-row electric sport utility vehicle (SUV) at its Kentucky facility in 2025, investing $1.3 billion in the project. However, the company recently informed suppliers that the start date will now be pushed back by several months. This marks the first production delay announced by a Japanese automaker in North America.
The automaker attributed the postponement to necessary adjustments in the design of the vehicle. Toyota is currently reviewing the timeline for the new start date. Despite the delay, the company intends to introduce 10 new EV models worldwide by 2026. While specific production plans for North America remain unspecified, the SUV produced in Kentucky was expected to incorporate an updated chassis.
In addition to the production delay, Toyota has also canceled its plans to manufacture new electric SUVs under its luxury Lexus brand in North America by 2030, choosing instead to import completed vehicles from Japan.
While Toyota had previously set a goal of producing 1.5 million EVs globally by 2026, updated plans shared with suppliers indicate a revised target of approximately 1 million. This adjustment is reflective of a broader slowdown in U.S. EV sales, which has been exacerbated by the slow rollout of competitively priced electric vehicles. As a result, many consumers are opting for hybrid models, an area where Toyota has a competitive edge.
Nevertheless, Toyota maintains a positive outlook on the future growth of the North American EV market and plans to continue its investments in the sector, particularly in light of anticipated stricter environmental regulations.
Other Japanese automakers are also stepping up their EV production efforts in North America, leveraging tax incentives provided by the Biden administration. For example, Honda Motor is investing around 1 trillion yen ($6.8 billion) to establish a new factory in Canada and plans to commence EV production at its Ohio plant in 2025.
Source: Nikkei
