Toyota Reduces Lexus Production In The US, Focuses On Hybrid Production Amid Tariff Policies

Toyota Corolla Cross Hybrid 2026. (Toyota USA)

JAKARTA - Japan's auto giant Toyota is reorganizing production for its luxury brand, Lexus, in the United States. The move comes in response to concerns over US import rates, prompting the company to simplify the production site of Lexus vehicles.

According to a recent report from Nikkei Asia, followed by Autoblog, Wednesday, September 10, Toyota plans to reduce the number of factories producing Lexus vehicles. Currently, two Lexus models were made in the US: the ES sedan in Kentucky and the TX SUV in Indiana. However, the source who spoke with the Japanese business publication said that Toyota would stop production of the Lexus ES at the Kentucky factory after orders for the current model were fulfilled. The new generation of ES, both gasoline and electricity versions, will be exported directly from Japan starting in 2026.

With this change, Indiana's Toyota Motor Manufacturing (TMMI) will be the only US factory to make a Lexus model. Meanwhile, production at Canadian factories will continue, including for popular RX and NX models.

This decision is also in line with Toyota's efforts to increase production of hybrid vehicles in the US. The Kentucky factory, one of the largest in the world, will shift its focus on producing popular hybrid models such as Camry sedans and RAV4 crossovers. Data from Toyota Motor North America shows sales of both models jumped significantly in August 2025. RAV4 sales rose 20 percent to 42,311 units, while Camry rose 14 percent to 28,523 units.

This production relocation is touted as the main response to Trump's administrative tariff policy. Although Japan's car import rate fell to 15 percent from the previous 25 percent, this figure is still much higher than the 2.5 percent tariff that Toyota usually enjoys. Because building a new plant will take time and cost, Toyota chose to simplify domestic production and still import some Lexus models from Japan.