Toyota Cancels Lexus LF-ZC EV Saloon, Reports 21.5% Income Drop, Plans $2B Texas Plant
TM•Toyota has scrapped its planned Lexus LF-ZC electric saloon, deferring production to mid-2027 and redirecting gigacasting efforts to more in-demand SUVs. The company reported FY26 operating income down 21.5% to ¥3.76 trillion due to tariffs and inflation and announced a $2 billion Texas plant expansion for 2,000 jobs.
1. Lexus LF-ZC Electric Saloon Scrapped
Toyota has officially ended the development of the road-going Lexus LF-ZC electric saloon, originally slated for mid-2027 production. The decision reallocates gigacasting resources toward sport utility vehicles and other body styles deemed more aligned with current market demand.
2. FY26 Earnings Hit by Tariffs and Inflation
For the fiscal year ended March 2026, Toyota’s operating income fell 21.5% to ¥3.76 trillion, as a ¥1.38 trillion tariff burden and rising costs offset gains from higher volumes and pricing. Revenue climbed 5.5% to ¥50.68 trillion, while consolidated vehicle sales rose 2.5% to 9.595 million units.
3. $2 Billion Texas Expansion
Toyota filed for approval to invest $2 billion in its San Antonio manufacturing complex, dubbed Project Orca, which will add a new vehicle assembly line. Construction could begin later this year, with production slated for 2030 and the creation of approximately 2,000 jobs.
