Toyota to Build Two New EV SUVs in Kentucky as Automakers Shift Production to U.S.

Toyota will build two new electric sport-utility vehicles at its Georgetown, Kentucky, plant, the company said, marking another step in a broader shift by global automakers to move production to the United States amid new tariff policy and rising cost pressure.

The two models, described by Toyota as three-row SUVs drawing on the company’s RAV4 and Land Cruiser lineups, will be produced at the company’s largest U.S. facility as part of a strategy to increase domestic manufacturing and reduce exposure to a 25 percent tariff on foreign-made cars and parts imposed by the U.S. administration in March. Toyota’s executive chairman, Akio Toyoda, and CEO Koji Sato have overseen a gradual expansion of Toyota’s electric vehicle offerings in the U.S. market as the company retools its factory footprint.

The Georgetown announcement follows moves by other major automakers to shift production or expand U.S. manufacturing. General Motors has announced a nearly $1 billion plan to convert a battery plant in western New York into a V8 truck plant, Honda is building multiple models in Ohio, and companies including Ford, Volkswagen and BMW have also increased U.S. production plans. Hyundai and others have similarly reconsidered supply-chain and factory strategies to limit tariff exposure and logistical risk.

U.S. officials have cited job creation as an objective of the tariff policy. Treasury Secretary Scott Bessent said in April that President Trump had met with domestic and foreign auto producers and was "committed to bringing back auto production to the U.S.," adding that officials hoped to give automakers a path to bring production onshore "quickly, efficiently, and create as many jobs as possible."

Automakers and industry executives have warned, however, that tariffs and other cost pressures are contributing to higher vehicle prices for consumers. Several manufacturers have implemented line-wide price increases this year. Ford added $2,000 to the price of some Mexican-made cars in May, Subaru applied a roughly 16 percent increase to a base model for 2026, and Volkswagen announced similar adjustments. "Business is not sustainable longer term without significant price increases," Mark Templin, Toyota’s chief operating officer for North America, said in May, adding that the industry already faced an affordability problem.

Data point to rising costs for buyers: the average transaction price for a new vehicle topped $49,000 last month, and the used-car market has also seen persistent inflation. In August, the pre-owned vehicle sector recorded an inflation rate of about 15 percent, while car repair inflation rose roughly 8 percent, trends that can increase ownership costs and insurance premiums for drivers.

Consumer advocates and industry analysts have warned that tariffs could amplify those pressures. Michael DeLong, a car insurance analyst at the Consumer Federation of America, said tariffs are likely to "drive up auto costs" and could make ownership more costly for a wide range of consumers.

The push to reconfigure production has come as the broader U.S. labor market has shown mixed signals. Federal jobs data for August indicated the economy added about 22,000 positions, below Wall Street expectations and with a reported loss of 12,000 manufacturing jobs that month, underscoring the uneven employment impacts tied to industrial policy and corporate investment decisions.

Separately, immigration-enforcement actions have complicated some foreign automakers’ U.S. plans. Federal officials raided a newly constructed Hyundai–LG battery plant in Georgia, detaining hundreds of South Korean engineers and prompting a diplomatic dispute between Washington and Seoul that business and policy officials say could affect future foreign direct investment and operations in the United States.

Toyota’s decision to locate two additional EV models in Georgetown underscores how trade policy, domestic job goals and corporate strategy are reshaping where vehicles are built. The company has said the move is part of a longer-term plan to "strategically transition" manufacturing and to better align production with market and regulatory developments in the U.S. auto market.