Toyota RAV4 Production Might Stay In America Over Tariffs: Report

The new RAV4 was originally supposed to be imported from Canada and Japan. But thanks to tariffs, it could also be built in Kentucky.

Photo by: Toyota

By: Brian Silvestro

Apr 21, 2025 at 10:30am ET

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Toyota is rethinking the strategy behind its most popular vehicle. The company is considering producing the new RAV4 in Kentucky in a bid to drive down tariff costs, a report from Reuters claims.

The current RAV4 is produced in Kentucky, Canada, and Japan. The next one, set to be unveiled later this year, was supposed to be imported from Canada and Japan, with production in Kentucky winding down. Reuters, citing three unnamed sources familiar with the matter, say Toyota is now walking back that plan to reduce the impact from Donald Trump's 25-percent tariffs on imported vehicles.

Reuters says the scheme isn't finalized, and that any changes to the current plan for RAV4 production—like retooling facilities and tweaking supply chains—would be "time-consuming and capital-intensive." If RAV4 production in Kentucky is approved, it wouldn't start until 2027, sources told Reuters.

Toyota RAV4 Plug-In Hybrid

Photo by: Toyota

Toyota declined to comment on the matter when reached by Motor1.

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The RAV4 was the top-selling vehicle in the US last year, with over 475,000 units sold—more than even the Ford F-150. It's unclear how severely the new model will be affected by tariffs, or what percentage of RAV4 production will happen in Kentucky, should the plan be approved. Toyota currently operates 11 plants in the US, responsible for building roughly half of the 2.3 million cars it sold here in 2024.

Trump, as recently as last week, has considered softening or exempting automakers from the blanket 25-percent tariff levied earlier this month. “I’m looking at something to help some of the car companies with it,” he told reporters last Monday, according to AP News. “And they need a little bit of time because they’re going to make them here, but they need a little bit of time. So I’m talking about things like that.”