Toyota has announced it will build a new US$3.6bn plant at its San Antonio, Texas campus and shift Tacoma pick-up production there from its existing plant in Baja California, Mexico. The new 2.5 million square foot facility is due to open by 2030, will create around 2,000 local jobs, and forms part of a wider effort by the Japanese automaker to insulate itself from US tariffs on Mexican-made vehicles.

The expansion will double the size of the San Antonio campus to roughly five million square feet and bring Toyota’s total investment there to US$8.3bn (not adjusted for inflation) since construction began 23 years ago. A separate 500,000 square foot rear axle plant is due to open at the campus this autumn. San Antonio is currently running near its full capacity of around 200,000 vehicles a year; the new line will add a further 150,000 units, ramping up over four years beginning in 2030.

A separate Toyota plant in Mexico, located in Guanajuato, will continue building Tacomas for export to the US, and the automaker has emphasised it will uphold the broad strokes of its commitment to operations across all three North American countries. What replaces the lost production at the Baja plant, which built 166,653 Tacomas last year, has not been decided; a company spokesperson said Toyota had nothing further to share.

At the time of writing, vehicles shipped north from Mexico face US tariffs of up to 25%, a cost that has weighed on Toyota’s margins and upended industry-wide cross-border production planning built up over decades. In a statement, Toyota Motor North America President Ted Ogawa framed the expansion in decidedly anodyne terms, remarking that it merely reflects the company “deepening our commitment to American manufacturing”.

The Tacoma is arguably too commercially important to leave exposed to the US’ ongoing volatility around trade. Toyota sold a record 274,638 units in the US during 2025, up 42% on 2024, with sales rising almost 10% through June 2026, as the company closes in on potentially overtaking General Motors in US new car sales volume.

The deterioration of USCMA talks has only added further weight to the announcement’s timing. Indeed, it lands just five days after the US allowed a 1 July deadline to renew the North American trade pact pass without extension, opting instead for rolling annual reviews rather than a long-term deal. Toyota had urged Washington to extend the agreement, calling it critical to integrated auto production. 

Ongoing US pressure to tighten regional content and domestic value rules for vehicle parts is adding further incentive for automakers to move production out of Mexico altogether. Bloomberg Intelligence Senior Analyst Tatsuo Yoshida remarked that the shift “appears strategically sound if current US trade policies and tariff levels remain in place,” but noted the more difficult question of what happens to the Baja plant’s spare capacity. “Any backfill product would likely need to target markets outside the US and offer sufficient scale to maintain plant profitability.”

The San Antonio expansion extends a pledge Toyota made last year to invest US$10bn in US manufacturing over the next decade, following separate commitments of US$1bn to plants in Indiana and Kentucky, as well as US$912m across five other states. Texas Governor Greg Abbott said the investment, which qualifies for a US$20m state grant, “reflects the strength of our workforce and the unmatched business advantages found only in our state.”