Toyota is making a strong appearance at the New York International Auto Show. The Japanese automaker achieved one of its best annual sales years in the U.S. market in 2025 and started 2026 with solid first-quarter results, easily outpacing key rivals like Ford and General Motors. However, the central focus at this year's show is how Toyota plans to maintain its leadership amid rising dealer prices and persistent increases in gasoline costs.
Notably, even as overall electric vehicle demand shows signs of cooling, Toyota is accelerating its efforts to expand its EV lineup. By the end of this year, the company plans to increase its pure electric model offerings from one to four. David Christ, Group Vice President and General Manager of Toyota Motor North America, who leads the company's North American operations, stated, "By year-end, our battery electric vehicle portfolio will grow from the current single model to four."
The new electric models will cover multiple segments. The compact C-HR is already arriving at dealerships, described by Christ as "a fun urban electric vehicle," with early feedback from dealers and customers reported as very positive. Following that is the bZ Woodland, a larger and more rugged model aimed at consumers who enjoy outdoor activities and gear. Later this year, Toyota will also launch an all-electric version of the Highlander—a seven-seat SUV offered exclusively as a battery-electric model, which will be produced in the United States, symbolizing a commitment to "American-made" products.
This localization strategy will apply to several models and comes at a significant cost. Christ highlighted Toyota's $13.9 billion investment in a battery plant in North Carolina, a recently announced additional $10 billion investment in the U.S. market, and a separate $1 billion allocation last week to expand production capacity in Kentucky and Indiana. "Our philosophy is to build where we sell, so we will continue to increase our investment in the U.S. market and local manufacturing," Christ explained.
Currently, approximately 85% of Toyota's U.S. sales are produced in North America, with 55% manufactured domestically within the United States. This production footprint allows Toyota to navigate tariff challenges more effectively than some competitors. However, models such as the GR Corolla and the new Tacoma still rely on imports, exposing the company to tangible cost pressures from tariffs. The Tacoma, produced in Mexico, is particularly affected—the Trump administration imposed a 25% tariff on all vehicles imported from Mexico, and even with partial rebates for using U.S. components, cost pressures remain substantial.
Toyota anticipates that its tariff costs for the fiscal year ending in March will reach $9 billion, the highest among mainstream automakers operating in the United States. "The tariff situation is severe and adds extra costs across the industry. We are actively managing it," Christ noted, adding that Toyota currently offers six models priced below $35,000. "We are putting significant effort into keeping our vehicles affordable and will continue to focus on that."
Christ also pointed out that affordability challenges for car buyers extend beyond the vehicle's sticker price. "It's not just the price of the car; it's also interest rates, insurance costs, and gasoline prices. We are highly sensitive to these factors." To help consumers cope with macroeconomic pressures, Toyota will continue to offer base-trim versions of its models.
On the supply chain front, Christ mentioned that while Toyota's vehicle sales in the Middle East have been "significantly impacted" by disruptions in the Strait of Hormuz, the company is monitoring the situation daily and has not yet experienced major supply chain interruptions as a result.
The auto show also highlighted Toyota's core growth driver: the fully redesigned RAV4, which occupies a central position on the display. The vehicle has undergone comprehensive upgrades to its powertrain, frame, and safety systems. "The RAV4 is our flagship product," Christ said. "It is the best-selling vehicle in the U.S. market."
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