Toyota is considering shifting some of its production of its next-generation RAV4 to the United States as the automaker reevaluates manufacturing strategies in the wake of U.S. tariffs on imported vehicles.
Key Points
- Toyota is considering producing the next-generation 2026 RAV4 in Kentucky to reduce exposure to U.S. import tariffs and meet anticipated high demand.
- The move would supplement existing RAV4 production in Japan and Canada, with U.S. production potentially starting in 2027 if approved.
- The RAV4 was the best-selling vehicle in the U.S. in 2023, accounting for 20% of Toyota’s American sales, prompting the automaker to explore expanding domestic output.
According to Reuters, sources familiar with the matter say the automaker is exploring whether to build the upcoming 2026 RAV4 at its plant in Kentucky, in addition to current production sites in Canada and Japan.
The potential play is in response to trade pressures created by Trump's 25 percent tariff on imported cars. Building more vehicles in America would help Toyota flatten out cost risks associated with the new charges, while simultaneously reducing the company's exposure to currency fluctuations tied to the Japanese yen.
The plan is still in the ideation phase, but there are indications that Toyota could begin producing RAV4s in Kentucky as early as 2027 if the strategy is greenlit.
Toyota currently builds the RAV4 in Kentucky, Ontario, and Japan. The upcoming sixth-generation model—expected to be unveiled later this year—will mark the SUV’s first major redesign since the fifth-generation debuted in 2019.
The RAV4 remains Toyota’s best-selling model in the United States and was the top-selling vehicle in the country last year, surpassing the Ford F-150. Toyota produced approximately 1.3 million vehicles in the U.S. last year—more than half of its total U.S. sales—and operates 11 plants nationwide.
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An experienced automotive storyteller and accomplished photographer known for engaging and insightful content. Michael also brings a wealth of technical knowledge—he was part of the Ford GT program at Multimatic, oversaw a fleet of Audi TCR race cars, ziptied Lamborghini Super Trofeo cars back together, been over the wall during the Rolex 24, and worked in the intense world of IndyCar.
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Comments
I suspect we'll see a lot more of this soon. But it's going to take a long long time
I was considering a Rav4 having driven one that was about ten years old. It had room, it was not a powerhouse, but reasonably agile and capable of giving good gas mileage.
Then I drove a 2024 version that had less than 10k on it. I have to say I was very disappointed. No get up and go at all. I blame the auto trans as I think the engine was probably fine. If they would put a manual trans in it then it would be a much more viable vehicle.