Toyota has announced a plan to spend $1 billion on increasing production capacity at a pair of U.S. plants, as part of a larger rollout of $10 billion in domestic investments over the next five years. According to a March 23 release from the company, $800 million will go toward increasing capacity for Toyota’s Camry and RAV4 lines at a plant in Kentucky. The remaining $200 million will be used to increase capacity for the Grand Highlander SUV at a plant in Indiana.
Toyota also announced an additional $4 million in grant funding for Kentucky, which will go toward STEM learning resources at local schools, as well as $400,000 for Eastern Kentucky University’s manufacturing engineering program. “Toyota’s investment in the U.S. is for the long-term, tied to our philosophy of building where we sell and buying where we build,” said Toyota Motor North America COO Mark Templin.
In August 2025, Toyota said that it expected to take a $9.5 billion hit from President Donald Trump’s tariffs on foreign cars. Three months later, in November 2025, it unveiled its $10 billion U.S. manufacturing investment plan alongside the opening of a new battery manufacturing facility in North Carolina. At the time, the company touted the North Carolina plant as its first in-house battery facility located outside of Japan.
From a supply chain perspective, Toyota’s strategy aligns with onshoring and capacity-expansion investments by Asian OEM peers such as Honda, Nissan, Subaru, Mazda, Hyundai and Kia, as well as European players including BMW, Mercedes-Benz and Volkswagen. Within the framework of Section 232 tariffs, USMCA rules and Battery Belt incentives, Japanese Tier-1 suppliers including Denso, Aisin, Bridgestone and Panasonic Energy are expected to expand their U.S. footprints accordingly. Investments in lithium iron phosphate (LFP), solid-state batteries and hybrid technology form the central pillars supporting Toyota’s multi-pathway strategy toward its 2030 targets.
