Navigating Tariff Storms: How Toyota is Responding to Rising Car and Maintenance Costs
In late spring of 2025, the air in Plano, Texas was already starting to feel hot—much like the ongoing discussion around tariffs. During an exchange with industry partners and media, Toyota North America's Chief Operating Officer, Mark Templin, bluntly addressed a key issue: if the 25% tariff on imported vehicles persists and car prices can't rise to match, the situation is simply unsustainable.
This wasn’t an exaggeration. Toyota currently operates 14 factories in North America, with 11 of them in the U.S., but even so, half of the vehicles it sells in the U.S. are still imported. This means that no matter how much Toyota invests in local production, it cannot escape the toll of tariffs.
If you happen to be Joe Sanders, a 48-year-old science teacher from Arizona, you might have already felt the weight of this “invisible burden.” Joe had been planning to replace his old 12-year-old RAV4 but was taken aback when he saw the price tag. “This new model is nearly $5,000 more expensive than I expected,” he said, shaking his head. “And repair costs are rising too. A friend had to fix a transmission on his Camry, and it cost over $4,000.”
It’s not just consumers feeling the pinch. Suppliers along the chain aren’t benefiting from the increased parts tariffs either—in fact, their profit margins are being squeezed further. Templin openly stated that the end result of this scenario will be higher prices, fewer sales, and more expensive repair costs, ultimately affecting the health of an auto industry that contributes $1.2 trillion to the GDP. “For more Americans, a new car is becoming out of reach,” he noted.
So, how is Toyota responding? The answer, it seems, is calm, slow, and steady.
Toyota isn’t reacting hastily, like some other brands, by abruptly announcing shifts in production lines or making drastic changes to its model lineup. Templin emphasized, “You can’t move production overnight.” This is not only because building new factories takes time, but also because Toyota adheres to a “long-term thinking” philosophy. They believe that, eventually, trade agreements will bring relief and that the U.S. government will recognize the negative impact of tariffs on the broader economy.
But that doesn’t mean Toyota isn’t preparing for the future. Toyota North America’s General Manager David Christ explained that tariffs are forcing the company to re-evaluate where each model should be produced. He added, “This is something we naturally do on a regular basis, but now, with tariffs in play, we might need to reassess even sooner.”
As for product launches, Toyota is facing a major year. The lineup for 2026 includes 24 new or updated models, many of which are electric vehicles. These include the new bZ electric crossover, its larger sibling the bZ Woodland, and the updated electric C-HR. Additionally, Lexus is set to release the eighth-generation ES sedan and the luxurious RZ with multiple powertrain options.
This is good news for consumers. Take, for example, Emma and Tyler, a young couple from Seattle who recently welcomed their first child. They’ve been eyeing eco-friendly vehicles, especially the new RAV4 hybrid. “We drive through mountainous terrain to get to work, and it’s rainy and snowy all year round, so we need power but also want to be energy-efficient,” Tyler explained. “If the price is right, we’re definitely considering an electric vehicle.”
Currently, the RAV4 is produced in Canada, the U.S., and Japan. Toyota’s North American Vice President, Mike Tripp, stated that the company won’t change the mix of models available in the U.S. based on where they’re manufactured. Instead, they’ll continue to guide consumers to the models that best suit their needs, regardless of where they are made.
Tripp also noted that Toyota’s marketing strategy hasn’t changed in response to tariffs. In fact, the company is focusing on how to influence consumer thinking in the long term, planting seeds for future purchases. For example, when trade tariffs were first announced, Toyota assessed its messaging and which vehicles to display at auto shows, preparing for potential adjustments—but no drastic decisions have been necessary. For instance, Toyota continues to advertise the new 4Runner, even though it’s manufactured in Japan.
For Toyota, this isn’t just a short-term policy battle—it’s a long-term game that involves maintaining consumer trust, brand positioning, and supply chain stability.
Tripp summed it up well: “What we’re doing is thinking about the future, not just today’s sales.”
It’s a highly mature strategic outlook. In an era of constant political, trade, and technological disruptions, perhaps the rarest thing is not to react hastily, but to stay calm amidst the turbulence. As Joe Sanders, the science teacher, put it, “I’m not against price increases, but I want manufacturers to give me a reason for it, and build trust while they’re at it.”
And it seems that Toyota is doing just that.