Playing The Long Game
Despite being a global automotive leader, Toyota moved cautiously during the electric vehicle boom, while others heavily invested in new EV strategies. The Japanese marque has been moving with the tide, albeit relatively slowly, with its U.S. lineup now consisting of a broad mix of pure gas cars, conventional hybrids, plug-in hybrids, and battery electric vehicles. It even offers a hydrogen-powered car with the Mirai.
One vehicle type currently missing, though, is a production-series extended-range electric vehicle, but according to CnEVPost, citing Nikkei Asia, the automaker is already working to fill that gap. Production of its first EREVs is reportedly set to start in April 2027, though availability will initially be region-specific.
Toyota
Ground Zero
The report stated that Toyota will build its EREV models in China, targeting about 200,000 units in 2027 before expanding output to 400,000 units in 2028. That may not sound like a lot next to Toyota’s global scale, especially when the 2027 target equates to an average of about 22,000 units per month from April through December, but it would still represent a sizable push into China’s EREV market.
According to China Passenger Car Association (CPCA) data, about 616,000 EREVs were sold in the first eight months of this year, a 15.85% drop year-over-year. In comparison, all-electric cars recorded 698,000 retail sales in August 2026 alone.
But if Toyota can deliver compelling EREV models in China, it could help expand the segment, a space Nissan is also competing in through its Dongfeng Nissan joint venture with the NX8. Additionally, investing in a non-BEV strategy could help Toyota sidestep some of the price war in China’s battery-electric market, where intense competition among local automakers has driven repeated price cuts.
Toyota
EREVs Are Just Getting Started
Even in the U.S., EREVs barely have a presence, though Stellantis is set to expand into the segment with models including the Jeep Grand Wagoneer and Ram 1500 REV. The powertrain shares similarities with plug-in hybrid electric vehicles, except that electric motors drive the wheels, while the combustion engine primarily serves as a generator.
If Toyota succeeds with EREVs in China, the country could serve as the brand’s testing ground for the vehicle type at scale. EREVs could eventually be added to its broader global multi-pathway strategy, providing more flexibility depending on what certain markets need. Such flexibility could help protect the company from sudden market shifts, a risk highlighted by Stellantis taking a $26 billion hit from EV-related write-downs last year.
Toyota
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