Toyota further slows U.S. EV production plans, warns of job loss risks

Toyota is standing firm behind its decision to delay the production of all-electric vehicles in the U.S. until 2026. 

When asked about the company’s position, Toyota Motors Chairman Akio Toyoda said an abrupt shift to electric vehicles would lead to a significant number of job losses in the industry.

The shift: News of Toyota plans to delay its EV production in the U.S., reflects the Japanese automaker’s more cautious approach to transitioning to fully electric vehicles, amid waning interests in EVs in the U.S. 

Product impact: The delay most directly impacts plans at Toyota’s assembly complex in Georgetown, Kentucky, which the automaker said in February it would be investing $1.3 billion into to build EVs.    

• Toyota’s initial plans were to build its first EV in the U.S. at the Kentucky facility in 2025. The all-electric vehicle is reportedly expected to be a three-row crossover called bZ5x.

• Toyota’s decision to push back the production of the EV also affects Subaru, which is expected to get a derivative of the SUV for its lineup, as part of its production partnership with the automaker.

• Plans to build a Lexus EV crossover in the U.S. could be moved to Japan as part of the company’s efforts to reduce the number of EVs produced in North America. 

Toyota announced last Oct. it was investing $8 billion into a hybrid and electric vehicle battery plant in North Carolina, which also speaks to the magnitude of its recent decision to delay its EV production in the U.S. and the potential impact beyond Kentucky.

What’s the plan? Toyota’s strategy to reach zero-emissions consists of what the Japanese automaker refers to as a “multi-pathway” and will include EVs, hybrids, hydrogen fuel-cell vehicles, and other alternative powertrains. 

Beyond Toyota: As the world’s largest automaker by sales, Toyota’s decision to delay its EV production in the U.S. could influence other automakers to reconsider facets of their zero-emissions strategies to deal with challenging market conditions in the sector.

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