On Monday, July 6, Toyota Motor North America announced plans to invest $3.6 billion (approximately ₹30,000 crore) to expand its manufacturing operations in San Antonio, Texas. The expansion will include the addition of a second vehicle assembly line, which was approved by Toyota’s board of directors on July 1. This new line will be dedicated exclusively to the production of the Toyota Tacoma.
At present, the Toyota Tacoma is manufactured at the Japanese automaker’s production facilities located in Baja California and Guanajuato, Mexico. Toyota aims to begin full-scale production of the Tacoma in the United States by 2030, as it gradually shifts production from Mexico over the next four years. The San Antonio plant expansion will double its size to nearly 5 million square feet and create around 2,000 new jobs.
“Toyota’s continued investment in North America is a testament to our confidence in the region’s workforce, innovation and long-term growth potential,” said Ted Ogawa, President and CEO of Toyota Motor North America (TMNA). “By expanding our San Antonio plant, we are reaffirming our commitment to American manufacturing, generating sustainable employment opportunities, and advancing our mission to produce high-quality vehicles that meet the evolving needs of customers today and in the future.”
Currently, Toyota’s San Antonio facility produces the Toyota Tundra and Toyota Sequoia. The addition of the Tacoma to this plant is expected to boost production capacity by 150,000 vehicles annually. For comparison, Toyota produced a total of 197,506 units of the Tundra and Sequoia combined in 2025, meaning the upgraded San Antonio facility could achieve an output of around 350,000 vehicles per year. Toyota had previously moved production of certain Tacoma variants from San Antonio to Guanajuato, Mexico, in 2020, and some pickup models will continue to be made there.
This move to relocate Tacoma production from Mexico is not unexpected, considering Toyota faces an estimated tariff exposure of $8.6 billion. The Tacoma pickup is Toyota’s third best-selling model after the RAV4 and Camry, with 274,638 units sold in 2025. Under the existing tariff policy introduced by former President Donald Trump, all Tacoma units manufactured in Mexico are subject to a 25 percent import duty. Additionally, Texas Governor Greg Abbott confirmed that Toyota’s investment qualifies for a $20 million state grant under Texas’s economic incentive programs.
“This Texas-sized investment reflects the strength of our workforce and the unmatched business advantages that only our state can offer. Supported by the Texas Enterprise Fund and the JETI program, this expansion will create economic opportunities for generations of San Antonio families and reinforce Texas’s position as a global hub for advanced manufacturing,” Governor Abbott stated.
Toyota’s decision to accelerate Tacoma’s domestic production is also aimed at reducing its escalating tariff-related costs. While the Camry avoids tariffs through its U.S.-based manufacturing, Toyota still pays a 25 percent tariff on most RAV4 units, as around 80 percent of them are built in Canada. Due to these import duties, Toyota reported an annual operating loss of $1.2 billion in 2025. The company further anticipates its tariff expenses could rise to as much as $17.2 billion by March 2027. Therefore, localizing Tacoma production in Texas is seen as a crucial step for Toyota’s financial and operational strategy going forward.
