Toyota’s vehicles are known for their reliability, pushing 200,000 miles — even 300,000 miles — without needing more than an oil change. It just seems like Toyota will always be there. Even if you buy from another automaker, you just have this sense that Toyota will always be there as an option later.
But Toyota has continued to sound the alarm: “Unless things change, we will not survive.”
Toyota is safe, but not for long
Over the past few weeks, the car industry has been hearing Toyota CEO Koji Sato’s words echoing in their ears. Sato told nearly 500 suppliers in late March 2026 that Toyota and other automakers were currently in a “crisis” due to competition from Chinese automakers and rapid EV advancements. Toyota can’t produce cars fast enough, let alone adapt them to the ever-changing market.
Is Toyota truly in trouble? You wouldn’t think so if you looked at the brand’s popularity.
Toyota had record sales in 2025, selling over 11 million vehicles and remaining the world’s top-selling automaker. In the United States, sales grew by 8%, with its hybrid options accounting for about 47% of the total sales. Toyota even said in January 2026: “The success of iconic top-sellers like the Camry and Corolla, alongside a broad lineup of vehicles starting under $30,000, shows that customers value having accessible options. This momentum was also fueled by our popular electrified vehicles, the ever-popular RAV4, and the exciting, redesigned Tacoma.”
However, sales numbers are not Toyota’s concern. It’s making money from those sales. For the last nine months of 2025, Toyota’s net income dropped to $20.3 billion from $26.8 billion in the same period of 2024. Toyota saw a 5% dip in profit per vehicle near the end of 2025, but remained highly profitable compared to competitors in the same segments. But as extremely cheap Chinese EVs keep flooding every market, Toyota likely feels pressure to lower its prices to compete. And that means the profit will get lower and lower.
Toyota is also notorious for being very slow to adapt. To keep its vehicles more reliable than those of other brands, Toyota is deliberately hesitant to add new tech or make major design changes. The automaker loves to conduct extensive testing before implementation. This has given Toyota recognition for its safety and reliability, but it won’t help against China. These automakers have the capacity to produce 50 million cars each year, which far exceeds domestic demand — which means over 20 million more to go around. And these EVs will be cheaper and far more advanced than Toyota’s in most cases.
In response, Sato has claimed Toyota is in a “battle for survival” against Chinese automakers. Going forward, the company will have to loosen its infamously strict quality standards to cut costs and increase output. This could mean cars that are no longer seen as “perfect” by the automaker. However, this has led to concerns. One car enthusiast stated on Reddit: “If Toyota has no quality advantage, why would I pick it over a Chinese car?”
That’s why Toyota is raising the alarms regarding Chinese EVs. The automaker isn’t in trouble just yet, but it knows that if things continue as they are, the profits will shrink. And this could soon spell disaster. Not just for Toyota, too. I can’t even think of one automaker that can price its cars anywhere near China’s, which has allowed the country’s EVs to become best-sellers everywhere they are offered.
Toyota is on its way to being one of the top-selling EVs in the United States. But this is the only market that’s denying Chinese EVs.
