Trump's Tariffs Might Compel Toyota To Manufacture Next RAV4 In The U.S. | Carscoops

      The redesigned Toyota RAV4 was initially set to be imported from Canada and Japan, but this plan may change.

      As of April 18, 2025, at 16:33, Michael Gauthier reports that the next generation of the RAV4 was expected to come from Canadian and Japanese factories. However, a significant 25 percent tariff has prompted Toyota to consider moving production to the U.S.

      If the new plans receive approval, production of the RAV4 could start in Kentucky as early as 2027.

      In a surprising turn, the Toyota RAV4 surpassed the Ford F-150 in sales last year, becoming the best-selling vehicle in the United States. Now, due to tariffs imposed during Trump's administration, production may remain within the U.S.

      Currently, while the RAV4 Hybrid is produced in Kentucky, Toyota is developing a redesigned version that is anticipated to debut later this year. However, reports indicate that this version would initially be imported from Canada and Japan.

      According to Reuters, three insiders have suggested that the company is reevaluating this plan because of the challenges posed by Trump's trade policies. Toyota is reportedly considering U.S. production for the sixth-generation RAV4.

      If this development takes place, it could once again occur at Toyota Motor Manufacturing Kentucky, with production potentially starting as soon as 2027. Toyota has refrained from commenting on “speculation” but mentioned their ongoing efforts to enhance manufacturing for the benefit of customers and employees.

      The 25 percent tariff on imported vehicles provides significant incentive for Toyota to manufacture the RAV4 in the U.S., but this is not the only influencing factor. A major motivation appears to be the higher-than-anticipated demand compared to supply.

      RAV4 sales increased by 9.3% last year, totaling 475,193 units, and the company seems to be optimistic about greater success with the redesigned model. If that is the case, production in Canada and Japan may not suffice to meet America's growing demand for crossovers. Additionally, producing in the U.S. could help buffer against fluctuations in the yen.

      Toyota has kept information about the upcoming RAV4 under wraps, but previous spy images suggest a completely new front design inspired by the latest Camry, featuring a unique mesh grille, vertical air curtains, and C-shaped headlights connected by a prominent bar.

      While most of the design changes are evolutionary, the crossover will have a taller beltline, sleeker bodywork, and sharper cladding. There will also be new taillights and a redesigned exhaust system.

      Anticipated to be built on the familiar TNGA platform, the 2026 RAV4 might switch to a hybrid-only lineup. Although this has yet to be confirmed, the company has been leaning in that direction, with several models like the Camry and Sienna offered solely with hybrid options.

      This could mean that the model may feature a hybridized 2.5-liter four-cylinder engine delivering a combined output of 225 horsepower (168 kW / 228 PS). The all-wheel-drive version might include a rear-mounted motor for enhanced traction in all conditions, bringing the total output to 232 horsepower (173 kW / 235 PS).