A CEO on a Mission to Mainstream EVs

Toyota's chief executive officer Koji Sato has mounted an unusually public and passionate defense of the company's decision to reboot the Highlander as a fully electric vehicle, pushing back against critics who argue that mainstream consumers are not ready for battery-powered three-row family haulers. In a wide-ranging interview and subsequent press conference, Sato laid out a detailed case for why the electric Highlander represents Toyota's most important product launch in a generation and how the company plans to make it accessible to middle-income American families.

The defense comes as Toyota faces a dual critique. Environmentalists and EV advocates have long accused the company of dragging its feet on electrification, pointing to Toyota's lobbying against aggressive EV mandates and its heavy investment in hydrogen fuel cells as evidence of reluctance. Meanwhile, industry skeptics argue that the mass market is not yet ready for an electric three-row SUV, citing range anxiety, charging infrastructure gaps, and the price premium associated with battery-electric vehicles.

The Pricing Argument

Sato addressed the pricing concern head-on, revealing more specific details about the electric Highlander's cost structure than Toyota has previously shared. The base model, equipped with a 75-kilowatt-hour battery and rear-wheel drive, will carry a manufacturer's suggested retail price of approximately $42,000 before any applicable federal or state tax incentives. The all-wheel-drive model with the larger 100-kilowatt-hour battery will start at approximately $48,000.

These prices, if Toyota delivers on them, would make the electric Highlander competitive with the current hybrid Highlander and significantly less expensive than most three-row electric SUVs currently on the market. The Kia EV9 starts at approximately $56,000, while the Rivian R1S begins above $75,000. Even the upcoming Chevrolet Equinox EV XL, which GM has positioned as a value option, is expected to start above $45,000.

How Toyota Plans to Hit the Price Target

Sato attributed the competitive pricing to several factors that Toyota has been developing for years behind the scenes. These include the following:

  • Battery cost reduction: Toyota has secured long-term supply agreements for lithium iron phosphate cells at costs significantly below the industry average, thanks to partnerships with CATL and BYD's battery division. The company expects pack-level costs below $100 per kilowatt-hour for the standard-range model.
  • Manufacturing efficiency: The electric Highlander will be produced at Toyota's Georgetown, Kentucky plant, which is being converted from Camry production. The use of an existing facility with a trained workforce reduces capital expenditure compared to building a new factory.
  • Platform sharing: The eBT architecture will underpin multiple future Toyota and Lexus models, allowing development costs to be amortized across a large volume of vehicles.
  • Simplified variants: Toyota is offering fewer trim levels and option packages than the current Highlander, reducing manufacturing complexity and inventory carrying costs.

Addressing Range Anxiety

Sato acknowledged that range anxiety remains the single biggest barrier to mainstream EV adoption and outlined Toyota's multi-pronged approach to addressing it. The extended-range electric Highlander's 350-mile rating, if achieved, would place it among the longest-range electric SUVs on the market and provide a substantial buffer for the daily driving patterns of typical family SUV owners.

Beyond the vehicle's own range, Toyota is investing heavily in charging infrastructure. The company recently announced a partnership with a major charging network operator to deploy more than 5,000 new fast-charging stations across the United States by 2028, with a focus on suburban and rural areas that are currently underserved. Toyota will also offer two years of complimentary charging at partner stations for electric Highlander buyers, removing the cost uncertainty that discourages some consumers from making the switch.

Home Charging as the Primary Use Case

Sato emphasized that the vast majority of electric Highlander owners will charge their vehicles at home overnight, a convenience factor that combustion vehicle owners do not enjoy. Toyota will offer a home charger installation program through certified electricians, with an estimated cost of $500 to $1,200 depending on the home's electrical capacity. For buyers who lack garage access, Toyota is partnering with apartment complexes and homeowner associations to deploy shared charging solutions.

The Mass-Market Philosophy

Perhaps the most compelling portion of Sato's remarks was his articulation of Toyota's broader philosophy on EV adoption. He argued that the industry's current approach of launching electric vehicles as premium products and gradually reducing prices has created a perception that EVs are luxury goods, alienating the middle-market consumers who represent the vast majority of vehicle sales.

Toyota's strategy with the electric Highlander is to invert this approach by launching at a mass-market price point from day one. Sato compared it to Toyota's approach with the original Prius, which was priced competitively with conventional sedans and eventually became the best-selling hybrid in the world. The goal, he said, is to make the electric Highlander a vehicle that mainstream families choose not because they are environmentally motivated but because it offers a better overall ownership experience than a comparable gasoline or hybrid model.

Production and Timeline

Sato confirmed that the electric Highlander is on track for a spring 2027 launch in the United States, with production beginning at the Georgetown plant in late 2026. Initial production capacity will be set at approximately 150,000 units per year, with the ability to scale to 250,000 units based on demand. Japanese and European market launches will follow approximately six months after the U.S. introduction.

Toyota is also developing a commercial and fleet version of the electric Highlander for ride-hailing services and corporate fleets, recognizing that the vehicle's spacious interior and low operating costs make it an attractive option for high-mileage applications.

The Stakes Are High

The electric Highlander represents a pivotal moment for Toyota. Success would validate the company's patient approach to electrification and demonstrate that mainstream EV adoption does not require sacrificing affordability or practicality. Failure would intensify criticism of Toyota's strategy and potentially accelerate the shift of family SUV buyers toward competitors who have moved more aggressively into the electric space. Sato made clear that he understands the stakes, concluding the press conference with a simple statement: this is the most important vehicle Toyota has launched since the Prius, and we intend to get it right.