Toyota’s Quiet Northward Pivot Signals a New Center of Gravity for North America’s EV Future

LIBERTY, N.C. — At the edge of northeastern Randolph County, Toyota Battery Manufacturing North Carolina is preparing its first shipments, the culmination of a $14 billion investment expected to generate more than 5,000 jobs. The facility, one of the most ambitious industrial projects in the Southeast, was long viewed as proof that the United States would remain Toyota’s anchor in the electric-vehicle transition.

But as the plant nears operation, Toyota’s broader strategy is shifting in a direction few in Washington expected: north.

What began as a series of subtle signals — expanded talks with Canadian officials, increased activity in Ontario and Quebec, and new investments in mineral supply chains — now appears to be a structural realignment. Facing nearly $800 billion in potential exposure from U.S. tariffs on Japanese exports, Toyota has steadily deepened its commitment to Canada’s emerging EV corridor.

The catalyst was unmistakable. After profit warnings forecasting a 21 percent drop in 2025, Toyota disclosed that Trump-era tariffs alone would erase $1.25 billion in earnings. Currency pressures and soaring material costs compounded the strain. For a company producing over 3.2 million vehicles annually in Japan — exporting more than half a million to the U.S. — the volatility was impossible to ignore.

While U.S. officials assumed the automaker’s future would remain tied to American manufacturing, state governments reacted sharply when Toyota began shifting components of its EV supply chain to Ontario and Quebec. Some accused the company of turning its back on American workers; others complained that Canada might become a “backdoor supplier,” allowing foreign automakers to benefit from U.S. tax incentives while using Canadian-refined materials.

Toyota’s Canadian pivot, however, is less about abandoning the U.S. than adapting to instability. Tariffs, steel and component costs, fluctuating EV incentives, and delays at Kentucky EV operations created a planning environment that executives privately described as “unpredictable.” The Inflation Reduction Act, designed to strengthen U.S. EV manufacturing, inadvertently highlighted its vulnerabilities: America has mineral resources but lacks large-scale refining capacity.

Canada does not.

Ottawa has committed more than $6.4 billion to accelerate nickel, lithium, and cobalt production, with another $2 billion prepared for refining expansion. The country is home to North America’s only cobalt refinery under construction and hosts rapidly growing clusters of battery-component manufacturers. These facilities sit close to the Michigan-Ohio automotive belt, creating an integrated corridor that meets U.S. tax-credit rules — something American producers have struggled to do.

The result is a map of the EV future that looks increasingly Canadian. Honda’s $15 billion Ontario EV program and rising investments in Quebec have created a gravitational pull: each new facility strengthens the industrial ecosystem, reducing risk for global automakers.

Toyota has not announced a withdrawal from the United States. Its North Carolina battery plant remains a cornerstone of its North American strategy. But the company’s quiet northward drift reflects a broader rebalancing underway in the global auto industry — one driven by minerals, refining capacity, and policy predictability rather than political slogans.

For the U.S., the shift raises pressing questions: Can Washington deliver regulatory stability? Can domestic supply chains mature fast enough to meet EV-era demands? Until those answers are clear, Canada’s role will only grow stronger.

And Toyota, like many others, is already adjusting.