The Car Giant Who Knew EVs Would Stall Is Betting Big On Plug-In Hybrids

Toyota is pushing into plug-in hybrids with a 20% sales target by 2030, focusing on growth and innovation

While many automakers were going all-in on electric vehicles, Toyota resisted the urge to put all its eggs in one basket. Instead, the company expanded its hybrid lineup, launched plug-in hybrids, and introduced a couple of EVs.

Toyota got a lot of flack for this, but their strategy turned out to be the right one as electric vehicle adoption has been much slower than some predicted. This has forced rivals to cancel expensive electric vehicle programs, delay others, and push back plans to go electric-only.

More: 2026 RAV4’s Evolution Is More Than Meets The Eye

Unsurprisingly, Toyota’s next conservative move is a foray into plug-in hybrids. However, the company is no stranger to PHEVs as they already offer eco-friendly versions of the Prius and RAV4. Over at Lexus, there are RX, NX, and TX plug-in hybrids.

We can expect more on the horizon as Toyota’s North American boss told CNBC, “We are going to grow our PHEV volume through the lineup over the next few years.” David Christ added, “We’re working to increase, perpetually increase, the amount of miles you can drive on EV-only range.”

Christ didn’t say which models could gain a plug-in hybrid option, but said they’re looking “across the lineup.” He added, “It’s more a function of where can we build them, and what is the product strength versus the competition.”

One of the most obvious plug-in hybrid additions would be a version of the Toyota Grand Highlander as it could share its powertrain with the Lexus TX 550h+. It has a 3.5-liter V6 engine, two electric motors, and an 18.1 kWh battery pack. This gives the crossover 404 hp (301 kW / 410 PS) and 33 miles (53 km) of electric-only range.

Despite making a lot of sense, Toyota officials downplayed the possibility of a Grand Highlander PHEV when we asked them in 2023. At the time, we were told the company was “confident” in their two existing hybrid options.

Plug-in hybrids only made up 2.4% of Toyota’s US sales last year, but the publication cited insiders as saying the automaker wants to increase that number to around 20% by 2030. That would be a huge jump, but the target reportedly isn’t set in stone as there are number of factors at play.

However, Toyota and Lexus customers seem to be embracing plug-in hybrids as sales climbed roughly 39% last year. That’s good news, but there’s an education gap that still needs to be overcome.

This has been a common problem for Toyota’s electrification efforts and, in 2021, the company told us studies showed 75% of consumers thought hybrids had to be plugged in. At the time, officials admitted that was a frustrating statistic as the automaker launched the Prius over two decades ago.