- Toyota went on a tear this week, revealing several new models including the new generation RAV4, updated bZ and the new C-HR.
- Before revealing the new models, the automaker warned that tariffs threaten to increase the prices of its cars, possibly making them out of reach for American consumers.
- Toyota has a large manufacturing footprint in the U.S., but still relies on imports from Japan, Canada and Mexico to meet its U.S. demand and keep prices in check.
Toyota executives did not mince words while issuing the automaker’s starkest warning yet on the impact of the Trump administration’s tariffs on its business.
“Half the vehicles we sell in the U.S. are imported,” Mark Templin, Toyota’s executive vice president and chief operating officer said during a press conference at Toyota’s North American headquarters in Plano, Texas this week where the new Toyota RAV4 and bZ were unveiled. “This is not sustainable,” he added.
Experts across the industry have warned that tariffs threaten to increase the prices of cars in the U.S., even if automakers produce them domestically.
No vehicle in the U.S. uses 100% of U.S.-made parts.
The 25% blanket tariff on completely built units (CBUs) went into effect on April 3. The separate 25% tariff on foreign-made auto parts and aluminum and steel went into effect early this month on May 3. Parts compliant with the U.S.-Mexico-Canada (USMCA) trade agreement are exempt. And automakers can apply for reimbursements for certain foreign-made parts of U.S.-assembled vehicles.
Toyota may be a Japanese brand, but North America is its largest market for sales volumes. And it makes a lot of cars here already.
The automaker has maintained a sprawling manufacturing apparatus on the continent for decades and has promised to expand that with the democratization of electric vehicles. But it still heavily relies on its plants in Japan, Canada and Mexico to fulfill the demand of its several models.
“Levies on parts will negatively impact car sales and make servicing and repairing more expensive for customers,” Templin said. “Supply chains are global and complex, we can’t just move production facilities overnight,” he added.
And then came the sharpest warning Toyota has issued yet on the global stage: “New cars would be out of reach for a lot more Americans.”
Then in a presentation, Toyota said it has 14 manufacturing facilities in North America, of which 11 are in the U.S. It has invested $67 billion in the U.S. over the years and created 200,000 direct jobs. Across Toyota’s supply chains, including its dealer and supply network, the automaker claims to have supported over 10 million jobs.
However, some of Toyota’s most popular models are made overseas. The current generation of the RAV4 and the RAV4 Hybrid are assembled in Canada, whereas all its battery electric vehicles and plug-in hybrids are fully made in Japan. Still, the list of U.S.-made models is not small. The Camry, Corolla, Sequoia, Tundra and many others are made in the U.S.
Toyota is also planning to build batteries for its hybrids, plug-in hybrids and fully electric models here in the U.S. Its $13 billion battery plant in North Carolina is up and running and will soon begin cranking out automotive-grade batteries for its U.S. products. And it has also bolstered its U.S. lineup with the all-new RAV4, which is now fully electrified, the updated bZ, all-new C-HR as well as the new Lexus ES and refreshed RZ.
It's also expecting more than half of its U.S. sales to be electrified models this year, which would be a new milestone. But the level of localization and tariff relief will determine the prices of the new models.
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