Back in the day, the Prius was the definitive eco-friendly car. The RAV4 may be Toyota’s second act.
The Toyota Prius was the undisputed “it” green car from roughly 2004 through 2012 in the U.S. Then Tesla showed up with Model S and later the mass-market Model 3 and smash-hit Model Y. At the time, Toyota CEO Akio Toyoda sneered at the rise of the electric car and Tesla.
But that was then. As General Motors and Ford drastically scale back their EV ambitions, Toyota is moving forward. Now Toyoda, as chairman, is pinning his hopes on an electrified Corolla and other electrics.
Toyota Second Act: The Hybrid As A Pure EV Alternative
Toyota’s newfound enthusiasm for electrics is now impacting EV leader Tesla, says Edmunds. Tesla owners are trading in for non-EVs at higher rates than other EV owners. Toyota has grown from the seventh-most-common auto brand purchased with a Tesla trade-in during Q2 2021 (6.9%) to the number-one Tesla trade-in beneficiary in Q2 2026 (17.3%), according to Edmunds.
The Japanese automaker has hit the right mix of hybrids and plug-in hybrids. “Toyota is the clear top beneficiary here when we look at Tesla trade-ins to dealerships, with hybrids emerging as the fastest-growing category among Tesla defectors,” said Jessica Caldwell, head of insights at Edmunds, in an email.
“When Tesla owners walk into traditional dealerships, they’re increasingly moving away from pure EVs—at least for now,” Caldwell said. In the second quarter of 2026, the share of Tesla defectors buying another EV dropped to 22%, down from 40.2% a year prior, according to Edmunds. Meanwhile, hybrid purchases among ex-Tesla owners reached a record 20.5%, with Toyota leading the pack as the number-one target for those trade-ins. “For now, hybrids are exactly where these shoppers are landing,” Caldwell said.
RAV4 Demand Through The Roof
Toyota dealerships have RAV4 waitlists of hundreds of customers. One California dealer had over 800 people waiting, according to Automotive News.
Demand for the now hybrid-only compact SUV is so high that Toyota’s three plants building the RAV4 haven’t been able to keep up, as Car and Driver spells out. The RAV4 tallied 479,288 units sold in the U.S. in 2025 compared to the Model Y at around 357,000 in the U.S. in 2025 (the latter according to Cox Automotive estimates).
RAV4 Now Hybrid-Only
Starting with the all-new 2026 RAV4, Toyota eliminated the pure gasoline option entirely. The RAV4 lineup is now hybrid and plug-in hybrid EV (PHEV) only.
- Standard RAV4 hybrid: the 2.5L four-cylinder gas engine works alongside a small electric motor in hybrid mode.
- RAV4 PHEV model: adds 54 miles of all-electric range on the SE trim. Beyond that all-electric range, the 2.5L four-cylinder gas engine kicks in and it shifts to hybrid mode, offering a total driving range of almost 500 miles (combining a fully charged battery with a full tank of gas).
And let’s not forget the Toyota Camry hybrid. Sales jumped to 179,033 year-to-date in June from 155,289 in 2025, according to Toyota’s second quarter announcement.
Cox Cites Rise Of Toyota And Subaru EVs
Toyota and Subaru were standout performers in the second quarter, according to Cox Automotive’s Q2 2026 report. “Both brands doubling their EV volume year over year. Toyota, in particular, has emerged as an increasingly significant player and now ranks among the top five EV sellers in the U.S. market,” said Cox.
Toyota EV growth in the U.S. exploded 225% over the second quarter of 2025, growing to 11,826 in sales from 3,639, according to Cox Automotive. And the Toyota bZ – a pure electric – shot up to 7,524 in sales in the second quarter from 3,639 in Q2 2025, 106.8% growth.