The Highlander Goes All-Electric in 2027
Toyota is making one of its boldest electrification moves yet: the next-generation Highlander, arriving in 2027, will be offered exclusively as a battery-electric vehicle. There will be no gasoline version, no hybrid option, and no plug-in hybrid hedge. One of the most recognizable three-row SUV nameplates in the American market is going fully electric at a time when the broader EV landscape is turbulent and consumer sentiment is mixed.
Dave Christ, Toyota Motor North America Group Vice President, framed the decision in deliberately confident terms during a recent interview with Automotive News. "This is not a niche product. There will be volume," Christ said. "Other mass-market brands have been selling EVs in higher volume than us for several years, and we think we felt one of our portfolio holes was not having EV options in the showroom." Toyota plans to launch four new electric models as part of this push, with the Highlander serving as the flagship of the effort.
A Calculated Risk With a Built-In Safety Net
The strategy is less reckless than it might appear on the surface. Toyota has a natural insurance policy in the Grand Highlander, the slightly larger sibling that debuted a few years ago and will continue to be sold with both gasoline and hybrid powertrains. Buyers who are not yet ready for an electric SUV can simply move up in size without changing brands or dealerships. The company is essentially splitting its three-row SUV market in two: the Highlander for EV adopters, the Grand Highlander for everyone else.
The sales data supports this approach. In 2021, Toyota moved more than 250,000 Highlanders in the United States. By 2025, that figure had cratered to fewer than 60,000 units. Meanwhile, Grand Highlander sales surged to 136,000 units last year on a 90 percent year-over-year increase. The traditional Highlander buyer has already migrated to the larger vehicle. Replacing the declining model with an electric variant risks relatively little volume while potentially capturing an entirely new segment of customers.
Stepping Into Territory Tesla Just Abandoned
The timing is also strategically interesting. Tesla recently discontinued the Model X, its only viable three-row offering, in order to free up factory capacity for its robotics ambitions. That leaves a gap in the premium electric three-row SUV segment that Toyota is positioning itself to fill. Christ alluded to this dynamic without naming Tesla directly, noting that the competitive landscape has shifted in ways that benefit a late entrant with strong brand recognition and a massive dealer network.
Christ acknowledged the headwinds facing EV sales following the expiration of federal purchase incentives. "Yes, EV sales are down after the federal incentives went away," he told Automotive News, "but we think that we deserve our fair share of the EV market that's there, and these four cars will help us do that." The statement reflects a pragmatic rather than euphoric outlook: Toyota is not predicting an EV revolution but is determined to stop ceding ground to competitors in a market that is still growing globally.
Why It Matters for the Broader EV Market
Toyota's decision to convert one of its highest-volume nameplates to electric-only production sends a meaningful signal to the industry. The company has long been criticized for moving too slowly on battery-electric vehicles while doubling down on hybrids. Committing the Highlander to a purely electric future -- without a hybrid fallback -- suggests that Toyota's internal calculus has shifted. If the world's largest automaker believes an electric three-row SUV can sell at mainstream volumes, it lends credibility to the notion that battery technology and charging infrastructure have reached a tipping point for family-oriented vehicles. Whether that bet pays off will be one of the defining storylines of the 2027 model year.
