May 30, 2026 – Toyota is expanding its industrial footprint in Brazil while simultaneously shelving a high-profile electric sedan, a dual move that underscores the automaker’s recalibration of its global EV strategy amid shifting demand and policy headwinds.
The company revealed plans to launch its second Brazilian factory in early November in Sorocaba, São Paulo state, positioning the city as Toyota’s central manufacturing base in the country. The new plant is a key piece of Toyota’s previously announced R11billion(roughly2.18 billion) investment roadmap through 2030.
On the product side, Toyota has decided to kill off development of its next-generation battery-electric vehicle — effectively axing the production version of the Lexus LF-ZC, a low-slung electric sedan with a coupe-inspired profile. The model had been engineered around large aluminum die-cast components using gigacasting techniques and was slated for assembly at Toyota’s Tahara facility in Aichi Prefecture, Japan. Originally expected to debut in late 2026, the timeline was first pushed to mid-2027 before the project was scrapped entirely.
The cancellation reflects Toyota’s read on the current market. While the company logged 190,000 EV sales worldwide in 2025 — a 42% jump from the prior year, buoyed by the refreshed bZ4X and the budget-friendly China-market bZ3X — leadership now considers premium sedans a poor fit for today’s demand landscape. Engineering resources will be redirected toward SUVs and other segments showing stronger consumer appetite.
The decision also arrives against a backdrop of retreating policy support. The Trump administration in the United States has rolled back EV purchase tax credits, while the European Union has softened its 2035 deadline to effectively ban new combustion-engine vehicles. These reversals have reshaped the strategic calculus for automakers globally, and Toyota’s latest moves signal a bet on flexibility over full-speed electrification — at least for the near term.
