Toyota to manufacture RAV4 in US to avoid tariffs

Japanese automaker Toyota plans to manufacture the next generation of its RAV4 SUV in the United States, a move that reflects accelerating shifts in global supply chains, three sources familiar with the matter told Reuters.

This move comes amid growing concerns about the impact of the Trump administration’s new 25 percent tariffs on imported cars.

The RAV4 is one of the best-selling vehicles in the US market, surpassing the Ford F-150 pickup truck, which had held the top spot for years, last year, according to data from JATO Dynamics.

Toyota sold more than 475,000 of the model in the United States alone, representing about a fifth of its total sales in that market. According to sources, Toyota had previously planned to export the new generation RAV4 to the US market from Canada and Japan. However, changes in the business environment prompted it to reconsider its plans, and it is now considering expanding production at its Kentucky plant.

This move is part of a long-term plan, as moving production to a new location requires significant investments and refurbishing production lines. The company is expected to unveil the sixth-generation RAV4 later this year, with a gradual rollout to global markets.

If Toyota decides to proceed with its US manufacturing plan, actual production in Kentucky could begin in 2027, without affecting existing production volumes at its Canadian plants.