Toyota Motor Corp. (NYSE: TM) reported a significant decline in profitability for the first nine months of fiscal year 2026, citing tariff-related costs and higher expenses, even as global vehicle demand pushed revenue higher. For the nine-month period ending Dec. 31, Toyota said operating income fell to $21.5 billion, down from $24.0 billion a year earlier. Net income declined nearly 25% year over year, falling to $20.3 billion from $26.8 billion.

The automaker attributed much of the profit erosion to U.S. tariffs on vehicle imports from Japan, which it said reduced operating income by approximately $8.0 billion. Toyota also pointed to rising labor and operational costs across its major global markets as additional factors pressuring margins.

Despite the decline in profit, Toyota reported higher revenue and record sales volume. Net revenue for the period rose 9.6% year over year to $255.6 billion, driven by increased vehicle deliveries. Global consolidated vehicle sales reached 7.3 million units, marking the highest level for the period and an increase of roughly 302,000 vehicles from the prior year.Sales rose across most of Toyota’s key regions, with the exception of Asia, where the company reported a decline of approximately 53,000 vehicles during the nine-month period.

In North America, Toyota recorded an operating loss of $40 million for the first nine months of FY2026, compared with operating income of $1.3 billion in the same period a year earlier. The company said the year-over-year decline of roughly $1.4 billion reflected tariff pressures, higher costs, and other factors, despite strong vehicle demand in the region.

Toyota’s U.S. vehicle sales totaled 2,518,071 units in 2025, representing an 8% increase, or approximately 275,000 vehicles, compared with the prior year. The company said U.S. sales were its highest since 2017. Several core models posted strong results. Toyota reported record U.S. sales for the Camry and Corolla Hybrid, RAV4, Tacoma, and Grand Highlander. Camry sales increased 2% year over year to 316,185 units, while combined Camry and Corolla sales rose 6.5% to 248,088 vehicles.

Truck and SUV sales accounted for much of the growth. Grand Highlander sales jumped 90.7% to 136,801 units, while Tacoma midsize pickup sales increased 42.4% to 274,638 units. RAV4 sales reached 479,288 vehicles, up 1% from the prior year, and Sienna minivan sales rose 35.2% to 101,486 units. For the full fiscal year ending March 31, Toyota forecast global consolidated vehicle sales of 9.75 million units. The automaker expects net revenue to increase approximately 4% to $333.3 billion.

However, Toyota said profitability is expected to remain under pressure. The company forecast a 20.8% year-over-year decline in operating income and projected net income of approximately $23.8 billion, down about 25% from the prior year, largely due to continued tariff impacts.

About Toyota Motor Corp.

Founded in 1937, Toyota Motor Corp. (NYSE: TM) is a global automotive manufacturer headquartered in Toyota City, Japan. The company designs, manufactures, and sells a wide range of vehicles, including passenger cars, trucks, SUVs, and hybrid models, and operates manufacturing and sales operations across major markets worldwide.

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