Toyota Motor has reportedly postponed its plans to start electric-vehicle production in North America due to a slowdown in EV sales and design adjustment.
Production was moved to the first half of 2026 instead of the initial planned schedule of 2025 according to the Nikkei.
The Japanese automaker reportedly told its suppliers that the date of the production of its first three-row, electric sport utility vehicle in Kentucky plant will be delayed by a number of months, attributed partly to adjustments in the vehicle's design. Earlier this year, the automaker said it will invest $1.3 billion in the facility.
Scott Vazin, a spokesperson of Toyota said, "We've always said it would be late 2025 and it could creep into 2026 and it does look like it's going to creep into 2026."
"We're still focused on our global [battery electric vehicle] target of 1.5M vehicles by 2026," Vazin told the BBC.
Over the next two years, the company has been planning to introduce five to seven battery EV models in the U.S.
Issues with federal regulations and supply disruptions have caused the automaker to delay the start of production by six months, which would push the start to June 2026, Reuters revealed.
Initially, the plan of Toyota was to manufacture electric SUVs under its Lexus brand by 2030 in North America. However, that plan was also shelved and instead the company will ship the completed vehicles from Japan to the U.S., Nikkei reported.
Aside from the factory in Kentucky, Toyota also announced plans to build a separate electric model at an Indiana plant. Given these goals, the company is doubling efforts in the production of its lithium-ion battery with a factory in North Carolina. The company expects the latter location to start operations next year.
The decision of the company to put off its EV production came amidst a global decline in demand for EVs, particularly in some major markets.
Tesla recently missed expectations in Wall Street, which put it in a position of having to contend with reduced annual deliveries. The Elon Musk-led company also announced it will no longer sell its popular and most affordable Model 3 compact sedan in the U.S.
European carmaker Volvo also shelved plans to produce fully electric cars by 2030. Instead, it stated that it is looking at selling hybrid vehicles by then.
American automaker Ford also scrapped plans to produce all-electric SUVs, as well as postponed the launch of an electric pickup truck.
