Toyota is selling cars faster than it can build them. With strong demand for hybrids, the company says it can “barely cover the demand.”
Toyota’s hybrids fuel sales growth in 2025
After reporting its fiscal second-quarter earnings on Wednesday, Toyota raised its sales and earnings forecast for the year.
In the first half of the fiscal year, the company sold a record 5.27 million vehicles, up 5% compared to the same period in 2024. Those numbers include its luxury Lexus brand.
Toyota said “strong demand from customers around the world” led to higher sales, particularly in Japan and North America. Hybrid vehicles primarily drove growth, with higher demand in competitive markets such as North America and China.
The Japanese automaker sold 2.27 million hybrids (HEVs) in the first six months of the fiscal year 2026. Including battery-electric vehicles (BEVs), plug-in hybrids (PHEVs), and fuel-cell electric vehicles (FCEVs), Toyota’s total “electrified” vehicles accounted for 47% of its total sales.
Toyota said the new RAV4, its best-selling vehicle globally, is carrying the growth as the first to adopt its software-defined platform, Arene.
Like most automakers, Toyota took a hit from the US auto tariffs. The company expects the 15% tariff will cost an extra 1.45 trillion yen ($9.4 billion) in the fiscal year.
Toyota expects higher sales, and cost-cutting measures will lessen the blow. It raised operating profit guidance for the fiscal year ending March 31, 2026, to 3.4 trillion yen ($22 billion). That’s up from its previous guidance of 3.2 trillion yen ($20.8 billion), but still a 28% decrease compared to the previous fiscal year.
“In terms of sales, we expect a very healthy situation going forward,” Toyota’s CFO, Kenta Kon, said during a news conference with reporters on Wednesday (via Automotive News).
Top comment by stetrain
Hybrids are fine. For a company that introduced their first hybrid 1997 and has been championing them as a better solution than EVs, I think still having more than half of their sales be plain ICE is disappointing.
Want to say hybrids and PHEVs are the way forward? Great! Build them! Make buying a RAV4 Prime in the US easier than getting a PS5 in 2020.
According to Kon, Toyota is still seeing “strong demand,” so much so that “we can barely cover the demand,” he added.
Electrek’s Take
Although hybrids are carrying the growth, Toyota’s BEV sales are still lagging. In the US, Toyota sold just 61 bZ electric SUVs in September. Through the first nine months of the year, Toyota sold just 12,264 bZs, down from 13,577 in the same period last year.
With the 2026 BZ upgrade rolling out and new EVs arriving soon, including the C-HR and bZ Woodland, Toyota’s BEV sales are expected to gain momentum over the next few months finally.
At the Japan Mobility Show, the company revealed plans for five unique brands under the Toyota Group, which it says will provide a diverse range of vehicles designed for every buyer.
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