Toyota is moving against a broader industry trend that has seen some manufacturers slow their EV ambitions.The Japanese automaker, by contrast, is increasing investment in North America and preparing to localize production of its next generation of electric vehicles.
This transition marks a significant moment for the company, which has historically leaned on hybrid technology. Now, it is attempting to balance that strength with a growing battery-electric portfolio aimed at capturing a larger share of the US market.
A Growing US-Built Electric Lineup
Toyota currently offers four electric models in North America, all of them imported: the bZ, bZ Woodland, C-HR, and Lexus RZ. According to Carscoops, this lineup will expand significantly over the next two years, beginning with a fully electric Lexus ES sedan expected later this month.
A key milestone will arrive in late 2026 with the launch of the all-electric Highlander, which will be assembled in Kentucky using batteries sourced from North Carolina. This model will be the first Toyota EV built in North America.
A second US-built electric SUV is already in development and is scheduled to enter production in Kentucky in 2027. While details about this vehicle remain limited, Bloomberg reports that it will be part of Toyota’s broader plan to offer seven EVs in the US market by that year.
Sales Momentum Shifts Toward Electric Models
Recent sales figures suggest a notable change in consumer behavior. The Toyota bZ recorded 10,029 sales in the first quarter of 2026, a 79% increase compared to 5,610 units during the same period a year earlier.
Over that same timeframe, Prius sales declined sharply, falling from 16,653 units to 9,737, a drop of about 42%. This shift allowed the bZ to surpass the Prius in quarterly sales, highlighting how quickly demand patterns can evolve.
Deliveries of the updated bZ and the related Lexus RZ more than doubled in March 2026, signaling growing traction for Toyota’s electric offerings after a slower initial rollout with the bZ4X.
Strategy Targets Former Tesla And Prius Buyers
Toyota executives have outlined a clear target audience for these upcoming electric models. Mark Templin, executive vice president and chief operating officer at Toyota Motor North America, described the future EV lineup as designed to attract “boomerang customers.”
Templin referred to buyers who previously chose the Prius for its environmental credentials, later switched to Tesla, and may now return to Toyota. He also characterized upcoming models as “Tesla killers,” indicating a direct competitive focus.
The company’s broader objective is to secure about 15% of the overall US automotive market and achieve a similar share within the EV segment. To support this ambition, Toyota has committed $10 billion to its US operations, including $1 billion dedicated to expanding facilities in Kentucky and Indiana.
At the same time, hybrids continue to play a dominant role. They accounted for 55% of Toyota’s North American sales in March 2026, up from 49% a year earlier, with demand strong enough to create waiting lists despite high production levels.
