July 7, 2026 - Toyota Moves Tacoma Production to Texas

This is the Telemetry Transportation Daily for July 7, 2026, and I'm Sam Abuelsamid, Vice President of Market Research for Telemetry. 

One of the key policy objectives of the Trump administration has been to pressure manufacturers to move production back to U.S. factories and employ American workers. Since the imposition of substantial tariffs in early 2025, including on countries that the U.S. has free-trade deals with, we've already seen this have an impact on the production plans of numerous automakers. Stellantis cancelled plans to build the next-generation Jeep Compass in Canada and moved that production to a factory in Illinois. General Motors also moved some truck production from Canada to U.S. factories and is repositioning truck and compact and midsize SUV production from Mexico to underutilized American plants. 

The latest automaker to follow this path is Toyota, which just announced a $3.6 billion expansion of its San Antonio, Texas, plant, which currently builds the Tundra full-size pickup and Sequoia SUV. A new assembly line will be added to produce the Tacoma midsize pickup. The Tacoma has been the bestselling midsize truck in the U.S. for many years, with nearly 275,000 sales in 2025, and it has been exclusively produced in Mexico since 2022. Toyota hasn't said if it will produce all Tacomas in Texas once the plant is up and running by 2030, but it's likely that most, if not all, will be produced at San Antonio since the U.S. accounts for more than 90% of the truck's sales volume. The lower-cost Hilux sells almost twice as many units as the Tacoma in Mexico.

While moving production to U.S. factories obviously benefits American workers, it may end up having significant repercussions for consumers at the entry-level part of the market. Many of the most affordable models available are built in Mexico or Asia, including the Nissan Sentra, Chevrolet Trax, and Buick Envista. Nissan already discontinued the Mexican-built Versa this year, and other models are likely to be dropped as well, further fueling the affordability challenge. Midsize trucks like the Tacoma start in the low-$30,000 range, but many of them sell for more than $60,000. Even affordable models like the Corolla that are assembled in the U.S. rely on many parts from Mexico and Canada, and Trump's decision not to renew the USMCA could cause those vehicles to either get more expensive or be dropped from U.S. availability. 

Thanks for listening.