Toyota targets 20% U.S. sales from plug-in hybrids by 2030, up from 2.4% in 2024.
New RAV4 PHEV offers 50-mile (80 km) EV-only range, part of plug-in expansion plan.
High cost, low awareness remain barriers despite increasing regulatory pressure and modest forecast growth.
Toyota Motor is planning to raise the share of plug-in hybrid electric vehicles (PHEVs) in its U.S. sales to approximately 20% by the end of the decade, up from 2.4% in 2024, according to company officials. Canadian PHEVs sales are quite strong as sales of the RAV4 Prime (PHEV) grew an impressive 51% YoY in 2024.
The plan reflects Toyota’s strategy to diversify its offerings as they continue to juggle with uncertainty around electric vehicle adoption and evolving regulatory policies. PHEVs have gained renewed interest from automakers seeking to meet emissions targets and consumer demand for flexible electrified options.
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Toyota executives view PHEVs as a practical alternative, once thought to be a bridge to EVs, for buyers hesitant to transition fully to battery electric vehicles (BEVs). The company has said it will continue to develop and expand PHEV options across its lineup.
“We are going to grow our PHEV volume through the lineup over the next few years,” David Christ, head of the Toyota brand in North America, told CNBC. “We’re working to… increase the amount of miles you can drive on EV-only range.”
Company sources indicated that the 20% PHEV sales target for 2030 was designed with regulatory thresholds, such as California’s Advanced Clean Cars II rule. However, they acknowledged the plan could shift depending on consumer uptake and other regulatory developments.
Industry forecasts suggest moderate growth for PHEVs. S&P Global Mobility expects U.S. market share to reach 5% by 2030, citing the high cost of dual powertrain systems. AutoPacific projects a 4.2% share, while AutoForecast Solutions sees minimal change from current levels, predicting a 3.3% share over the next several years.
Toyota reported a 39% increase in PHEV sales in 2024 across its Toyota and Lexus brands. This included a 30% rise in Prius and RAV4 PHEVs, and an 88.6% jump in Lexus models, driven in part by the new TX plug-in. Toyota Canada saw a 59.1% increase in Zero-Emission Vehicles sales (ZEV, comprising of EV, PHEV and FCEV) in 2024.
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The redesigned 2025 RAV4 PHEV, launched last week, now delivers an EV-only range of up to 50 miles or 80 km. Toyota plans to extend plug-in offerings across additional vehicle categories, based on market competitiveness and production capabilities.
Toyota’s electrified strategy includes internal combustion engines (ICE), hybrids, PHEVs, and BEVs. “We’ve got ICE. We’ve got hybrid. We got plug-in hybrid. We got EV,” said Cooper Ericksen, Toyota North America senior vice president of product and BEVs.
PHEVs still face barriers to broader market penetration, including limited consumer awareness and high costs. Toyota’s PHEV models carry substantial premiums, such as the RAV4 plug-in, which costs about $15,000 more than the base gasoline model and $10,000 more than the hybrid variant.
Despite these hurdles, Toyota expects electrified vehicles—including hybrids and PHEVs—to comprise over 50% of its U.S. sales in 2025, up from 46% in 2024 and nearly 30% in 2023. In Canada, they accounted for 49.6% of total sales.
