Toyota to Invest $3.6 Billion, Move Production From Mexico to Texas

The company incurred almost $9 billion in costs due to U.S. tariffs during the recent fiscal year, said a Toyota official.

Vehicles for sale are on display at a Toyota dealership in Houston on Jan. 4, 2022. Brandon Bell/Getty Images

Toyota Motor North America (TMNA) will invest $3.6 billion to add a second assembly line for its Tacoma trucks at the company’s manufacturing campus in San Antonio, Texas.

The San Antonio plant is a 2.2-million-square-foot site that currently employs more than 3,700 individuals. Toyota produces its Tundra truck and Sequoia sport utility vehicle at the site, which manufactured 197,506 vehicles last year. Including San Antonio, Toyota currently operates 10 manufacturing sites in the United States.

“The expansion will create 2,000 new, high-quality jobs and add 2.5 million square feet to Toyota Texas, doubling its size by 2030. TMNA will transition Tacoma production from Toyota Motor Manufacturing Baja California (TMMBC) to the expanded Toyota Texas plant over an approximate four-year period,” Toyota said in a July 6 statement.

“This latest investment will add another assembly line to the campus at Toyota Texas, which already includes a vehicle assembly line and new rear axle plant that is nearing startup.”

The decision to expand Texas production with Tacoma trucks comes more than a year after the Trump administration instituted tariffs on the import of automobiles and auto parts.

During an earnings brief on May 8, Takanori Azuma, chief risk officer and chief officer of Toyota’s accounting group, said that rising tariff duties cost the company roughly $8.8 billion for the fiscal year that ended in March.

Toyota said the latest expansion in San Antonio will bring the total amount invested at the site to $8.3 billion. The new facility will deploy advanced manufacturing technologies, increasing the local workforce to about 6,000 team members.

“Toyota’s continued investment in North America is a testament to our confidence in the region’s workforce, innovation and long-term growth potential,” TMNA CEO Ted Ogawa said.

“By expanding our San Antonio plant, we are deepening our commitment to American manufacturing, creating meaningful and sustainable jobs, while advancing our mission to deliver high-quality vehicles that meet the changing needs of customers today and into the future.”

USMCA Trade Deal

Toyota said it encourages a quick resolution to the U.S.–Mexico–Canada Agreement (USMCA) and makes the North American region “globally competitive.”

The Toyota logo highlights the grille of a Tacoma pickup truck on display in the Toyota exhibit at the Denver auto show at Elitch’s Gardens in downtown Denver on Sept. 17, 2021. David Zalubowski/AP Photo

The company’s comments came after U.S. Trade Representative Jamieson Greer said on July 1 that the United States opted not to renew the USMCA deal in its current form. Washington will continue to engage with Canada and Mexico to “address the Agreement’s shortcomings and our trade deficits with these countries,” he said.

The deal has not been canceled.

“The Agreement remains in force pending resolution of these issues or until the Agreement’s termination,” Greer added.

U.S. Trade Representative Jamieson Greer addresses reporters at the OECD Headquarters in Paris on March 16, 2026. Ludovic Marin/AFP via Getty Images

Last month, President Donald Trump said he was not looking to renew the deal since the United States does not need anything from Canada or Mexico, but the two nations need “everything that we have.” Both countries “have to treat us better,” he said.

In a July 1 statement, the Alliance for Automotive Innovation and other U.S. auto industry groups asked leaders from the three nations to “swiftly reach consensus” on extending the deal in a manner that preserves the existing trilateral partnership.

The alliance said the USMCA was a “success story” for the entire American auto industry, with billions being invested and thousands of manufacturing jobs created since the agreement came into effect.

The deal also benefits U.S. consumers by allowing American automakers to provide families with a “wide variety of vehicle choices that fit every budget,” the alliance said.

Some lawmakers have expressed their criticism of the USMCA deal. On May 20, a group of senators wrote a letter to Greer, highlighting the labor and wage issues created by the agreement.

“The continued offshoring of good manufacturing jobs is an existential threat to American workers and the communities they support. USMCA has not reversed this decades-long trend of companies closing U.S facilities to seek lower wages and environmental standards in Mexico,” they wrote.

“With workers in the Mexican automotive and electronics manufacturing sectors still only earning $3 to $5 per hour and Mexican manufacturing worker pay lower than in China, U.S. companies continue to offshore at alarming rates and use the threat of offshoring to depress U.S. wages.”