According to consensus forecasts, Toyota Motor is expected to announce on Friday its third straight quarterly drop in operating profit, with estimates pointing to a roughly 10% year-on-year decrease for the October–December period. The decline reflects sustained upward pressure on raw material costs—steel and resin expenses reportedly rose by more than 8% over the past year—as well as the impact of U.S. import tariffs that have shaved an estimated ¥50 billion ($350 million) off earnings this fiscal year. These headwinds come despite Toyota achieving record global vehicle deliveries of 2.9 million units during the quarter, driven by strong consumer adoption of its hybrid models. Investors will be watching closely for management’s guidance on cost-reduction initiatives and tariff mitigation strategies in the upcoming earnings release.

In a strategic move to capitalize on growing demand for electrified vehicles, Toyota has set a target to produce approximately 6.7 million hybrid and plug-in hybrid units annually by fiscal 2028, representing a 30% increase over its 2026 goal of 5.2 million units. This ramp-up will involve the addition of two new assembly lines in Japan and expanded capacity at existing plants in North America and Southeast Asia. The company expects these investments—amounting to ¥400 billion ($2.8 billion) in capital expenditure—to boost hybrid sales to account for nearly 45% of total volume by 2028. The plan underscores Toyota’s commitment to preserving its leadership in hybrid technology even as it accelerates development of battery-electric and fuel-cell vehicles.