Toyota Motor (TM) is considering producing the next-generation RAV4 SUV in the US, Reuters reported Friday, citing unnamed sources.

The current RAV4 is manufactured in Kentucky, Canada, and Japan. While Toyota initially planned to export the 2026 model from Canada and Japan to the US, it is now considering expanded US production, possibly at its Kentucky plant, to meet rising demand and avoid the cost of President Donald Trump's 25% tariffs on imported vehicles, the sources said.

Producing the RAV4 in the US would also help protect Toyota from exchange rate volatility, particularly the Japanese yen, according to the report.

A final decision has not been made, and any production ramp-up at the Kentucky plant is not expected to begin before 2027, sources said.

Toyota is set to unveil the updated RAV4 later in 2025. The RAV4 was the best-selling vehicle in the US last year, with over 475,000 units sold, representing a fifth of Toyota's US sales.

Toyota did not immediately respond to requests for comment from MT Newswires.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)