Toyota will not rule out using the “export potential” of its UK plant to send small volumes of vehicles to the US in a bid to navigate the supply chain challenges posed by Donald Trump’s tariff war, a senior European executive has said.
“If the business equation makes sense and the product that we’re producing is wanted by another region . . . we would of course study [our assets],” Matt Harrison, the chief corporate officer in Europe for the world’s largest carmaker, told the Financial Times.
Harrison warned of more “political whirlwinds” ahead as the car industry prepares for a series of tariffs the US president has threatened against its major trading partners.
Trump has handed carmakers a one-month reprieve on tariffs on imports from Mexico and Canada but the Japanese carmaker would be exposed if he goes ahead with the duties after 30 days.
US officials have also said “reciprocal” tariffs, allowing Trump to match import tariffs to those imposed on US goods by other countries, would still go into effect on April 2 as planned.
The EU, which levies 10 per cent on car imports compared to the 2.5 per cent by the US, could be one of the main targets of the “reciprocal” tariffs.
If the UK manages to avoid US tariffs and Trump delivers on his tariff threats against other trading partners, Toyota’s Burnaston plant could hold more “export potential”, Harrison said.
But he cautioned that potential volumes would be limited considering that smaller models produced in the UK do not match consumer demand for bigger-sized vehicles in the US.
“It doesn’t mean that there wouldn’t be some opportunity, but probably small volume. Not huge,” he added.
Toyota has been a longtime proponent of selling a broad variety of vehicles including hybrids and hydrogen-powered models. Sales growth of electric vehicles, meanwhile, has slowed in both Europe and the US.
But it will boost its EV line-up in Europe this year with three new all-electric sport utility vehicles for the main Toyota brand and another three EV models for Lexus. By the end of next year, it expects to have at least 14 battery-only models, and to sell only zero-emission vehicles across Europe by 2035.
Toyota said it would not be ready to start producing EVs at its European plants in the near term. Currently, its EVs are produced in Japan, India and at European plants owned by Stellantis.
“Maybe in 2025, battery EVs will be 10 per cent of our business, but still at 10 per cent of our business, the critical mass is not there to be fully competitive producing locally,” Harrison said.
Andrea Carlucci, vice-president of Toyota Europe, told the FT that Toyota’s diverse EV offering will help keep it from being dragged into a price war. Carmakers have struggled to make money from EVs, which are more expensive to produce than petrol vehicles and often require discounts to convince consumers to make the switch.
“It would be naive to tell you that we can rescue ourselves from a price war,” Carlucci said. “But I think we have a bit more freedom.”
Another battleground for the group in Europe is plug-in hybrids, such as the carmaker’s Prius model.
As EV sales growth slows in Europe, BYD and other Chinese rivals are increasing their hybrid offerings, which are also not subject to the EU’s anti-subsidy tariffs.
“Competition is very welcome,” Carlucci said. “I’m ready to take any challenge from anyone.”
