By Maki Shiraki
TOKYO (Reuters) -Toyota is considering producing the next version of its top-selling RAV4 SUV in the United States, three people familiar with the matter said, becoming the latest automaker to rethink supply chains to lessen the hit from U.S. tariffs on imported vehicles.
Toyota makes the current version of the popular SUV in Kentucky, Canada and Japan. It originally planned to export the new RAV4 to the United States from Canada and Japan but it is now also considering production in Kentucky as one option, given that demand for the car looks likely to outstrip supply, according to the people, all of whom declined to be identified because the information is not public.
Adding supply from the United States would also lessen the impact for the Japanese automaker from President Donald Trump’s 25% tariffs on imported cars and avoid potentially higher costs in cases of fluctuations in the volatile yen currency, two of the people said.
Toyota is set to unveil an overhauled 2026 RAV4 – its first redesign since the fifth-generation 2019 model – later this year and will then gradually introduce it in different markets around the world, one of the people said. It has yet to announce the exact timing of the U.S. roll-out.
Toyota has yet to finalise its production plans, the people said. Any production changes cannot be implemented quickly and require long-term planning, one of them said, due to the time-consuming and capital-intensive work involved in retooling manufacturing facilities and adjusting supply chains.
If the automaker goes ahead with the Kentucky plan, it would probably start production there in 2027, one of the people said. Regardless of the outcome with Kentucky, Toyota’s overall vehicle output in Canada is likely to be maintained, the people said.
Toyota said in a statement to Reuters that it continually studied ways to improve its manufacturing to best serve customers and provide stable employment for employees.
“We have nothing to announce at this time and will not comment on speculation,” it said when asked about plans to produce the new version of the RAV4 in Kentucky.
The RAV4 was the best-selling vehicle in the U.S. last year, knocking Ford’s F-150 pickup truck off the top spot it held for years, according to market research firm JATO Dynamics.
Toyota sold more than 475,000 RAV4s in the U.S. last year, accounting for a fifth of its total vehicle sales there.
It was not immediately clear how many of the new RAV4 the carmaker would produce in the United States. It has 11 plants in the U.S., including auto-parts plants, and produced almost 1.3 million vehicles there in 2024, equivalent to more than half of its 2.3 million U.S. car sales.
