Toyota Targets Midsize SUV Buyers with EV Push

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Toyota, long cautious about electric vehicles, is entering the midsize SUV segment with a fully-electric 2027 Highlander EV, despite the brand's strong hybrid sales and the overall decline in EV popularity in the U.S. market. The Highlander EV aims to compete against other midsize electric SUVs like the Kia EV9 and Hyundai Ioniq 9, but Toyota's past EV efforts in the U.S. have been underwhelming, and the federal EV tax credit was recently eliminated.

Why it matters

Toyota's move to produce an electric midsize SUV is a surprising risk, as the brand has historically been cautious about EV production and its best-selling models are now hybrid vehicles. This decision comes at a time when EV sales in the U.S. have declined year-over-year, and some automakers are even taking steps back from fully-electric vehicles. Toyota's success with hybrids raises questions about whether the company should further invest in the EV space or focus on expanding its hybrid offerings.

The details

Toyota plans to release a fully-electric 2027 Highlander SUV in late 2026, produced at its Georgetown, Kentucky plant. The Highlander EV will compete against other midsize electric SUVs like the Kia EV9 and Hyundai Ioniq 9, offering up to 338 horsepower and 320 miles of driving range. However, Toyota's first mainstream EV, the bZ4X, had lackluster specs compared to rivals, and sales have declined since its launch. Additionally, the federal EV tax credit was eliminated in 2025, which had previously provided a sales boost for electric vehicles.

• Toyota plans to release the 2027 Highlander EV in late 2026.
• The federal EV tax credit was eliminated in 2025.

What’s next

Toyota has yet to release pricing details for the 2027 Highlander EV, but the company has teased up to 338 horsepower and 320 miles of driving range, which would be competitive in the midsize electric SUV segment.