Toyota Motor is delaying the production of a new electric SUV in the U.S. by a year and shifting its assembly location to prioritize output of its in-demand Grand Highlander, as hybrid and internal combustion engine (ICE) models continue to outperform expectations.
According to a Bloomberg report, Toyota has postponed the launch of the planned EV, originally scheduled to begin production at its Princeton, Indiana, facility in 2027, to 2028. The automaker has also reassigned the EV’s production line to its Georgetown, Kentucky, plant, which is now set to begin building another electric model in late 2026, roughly six months later than initially planned.
The decision reflects changing consumer trends in the U.S. auto market, where electric vehicle sales are growing more slowly than anticipated. At the same time, hybrid and ICE models remain strong performers — particularly Toyota’s Grand Highlander, which has seen a surge in demand.
In June, the Grand Highlander was Toyota’s second-best-selling non-truck model, with deliveries rising 92% year-over-year. “The rush to pick up one of the midsize SUVs left dealers with just a three-day supply at the end of that month,” Bloomberg noted, underscoring the urgency behind the company’s reallocation of manufacturing resources.
Toyota continues to advocate for a diversified approach to vehicle powertrains, offering EVs, hybrids, hydrogen fuel-cell vehicles, and gasoline-powered models. The bZ4X — recently refreshed and renamed as the bZ — saw a strong first quarter, but broader U.S. EV adoption has softened in recent quarters.
The Georgetown shift is expected to create additional capacity for the Grand Highlander, allowing Toyota to meet demand in the hybrid-heavy midsize SUV segment while deferring EV output until market conditions improve.