TLDR
- Toyota Motor delivered 10.5 million Toyota and Lexus vehicles in 2025, up 3.7% from 2024, securing its sixth consecutive year as the world’s top-selling automaker.
- Hybrid vehicles drove 42% of global sales, with U.S. market performance jumping 7.3% to 2.93 million units despite 15% import tariffs.
- The company absorbed $9.7 billion in estimated tariff costs through local manufacturing, with only 20% of U.S. sales coming from imports versus Hyundai’s 60%.
- Toyota raised its operating profit forecast for fiscal year ending March 2026, with analysts projecting a 30% profit rebound in Q3 earnings due February 6.
- Stock price increased 3% Thursday following the sales announcement, outperforming Volkswagen’s 9 million units and Hyundai’s 7.27 million units.
Toyota Motor Corporation just reminded the market why it’s the world’s top automaker. The Japanese manufacturer sold 10.5 million Toyota and Lexus vehicles in 2025. That’s a 3.7% increase from the prior year.
Shares jumped 3% Thursday following the announcement. Toyota has now held the global sales crown for six consecutive years, beating Volkswagen’s 9 million units and Hyundai’s 7.27 million units.
The results came despite Trump’s tariff offensive. The president initially imposed 25% levies on Japanese vehicles before reducing them to 15%. Most analysts expected a sales slump.
They got the opposite. U.S. sales rose 7.3% to 2.93 million units. Toyota’s playbook combined hybrid technology with domestic manufacturing.
Manufacturing Edge Shields Profit Margins
Toyota’s local production footprint proved decisive. Only 20% of U.S. sales relied on imports from Japan. Hyundai imported 60% of vehicles sold in America during the same period.
This manufacturing advantage let Toyota absorb tariff costs without raising consumer prices. Competitors lacking domestic capacity couldn’t match that flexibility.
The company faces an estimated $9.7 billion tariff bill for the fiscal year ending March 2026. But management still raised the full-year operating profit forecast. Strong international demand and cost reductions offset U.S. tariff pressure.
Toyota reports fiscal third-quarter earnings February 6. Wall Street expects operating profits to surge nearly 30% year-over-year, according to Reuters estimates.
Hybrid Focus Delivers While EV Rivals Stumble
Hybrids carried Toyota’s growth story. The RAV4 and Prius models dominated U.S. showrooms. Hybrid vehicles now represent 42% of the company’s global sales mix.
Battery-electric vehicles accounted for just 1.9% of deliveries. Toyota chose transitional technology over pure electrification. That strategy paid off as EV demand plateaued across major markets.
Exports from Japan to the U.S. jumped 14.2%. The RAV4 SUV remained a top seller. Consumer appetite for fuel-efficient vehicles showed no signs of cooling.
Hyundai’s contrasting results highlight Toyota’s execution. The South Korean automaker grew revenue over 6% in 2025. But operating profit dropped 19.5% as tariffs ate into margins. U.S. levies cost Hyundai 4.1 trillion won.
Trump threatened Monday to raise tariffs on South Korean vehicles back to 25%. Hyundai shares fell nearly 5%. The company plans to boost Georgia facility production from 40% to 80% by 2030.
Toyota also posted a 0.2% sales increase in China. That marks the first growth in four years despite brutal competition from local EV manufacturers. The U.S. and Japan markets combined for over 40% of total sales, cementing their importance to corporate strategy.
The February 6 earnings report will show whether profit growth matches the sales momentum. For now, investors are betting Toyota’s hybrid bet continues paying dividends.
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