Toyota puts US electric vehicle plans on hold due to declining sales

Toyota is delaying the launch of its electric vehicle (EV) manufacturing in the U.S. as global demand for battery-powered cars continues to wane. The company had originally aimed to begin production in late 2025 or early 2026 but now expects to start its U.S. EV operations sometime in 2026, according to a spokesperson for the company.

Several other major automakers, including Volvo and Ford, have also recently scaled back their EV ambitions.

Despite the shift, Toyota remains committed to its global target of producing 1.5 million battery electric vehicles by 2026. Spokesperson Scott Vazin noted that the company plans to introduce 5 to 7 battery electric models in the U.S. market over the next two years.

Earlier this year, Toyota announced a $1.3 billion investment in its Kentucky factory to produce a three-row electric SUV, and it plans to develop another electric model at a plant in Indiana. To support these initiatives, Toyota is expanding its lithium-ion battery production with a new factory in North Carolina, expected to be operational next year.

Toyota’s announcement comes amid challenges in the global auto industry, where demand for electric vehicles is declining in several key markets. On Wednesday, Tesla reported quarterly results that fell short of Wall Street expectations, raising concerns about the company’s potential for its first annual delivery decline.

Volvo recently abandoned its goal of producing only fully electric vehicles by 2030, indicating it will now include hybrid models in its lineup, citing changing market conditions.

In August, Ford announced a major shift in its EV strategy, scrapping plans for a large all-electric SUV and delaying the launch of its next electric pickup truck, with Chief Financial Officer John Lawler stating the company is adjusting its plans due to “pricing and margin compression.”