Toyota RAV4 shortage reshapes SUV market

Toyota (TM) is contending with a sharp shortage of its RAV4 SUV after a delayed retooling for the 2026 model cut North American production by 30% through September. U.S. RAV4 sales fell 29.2% over the same period, to 253,664 units, and dealers hold only about four days of inventory compared with an industry average of 51 days in September. The pullback has cost the RAV4 its crown as America’s top-selling SUV and comes as Toyota had been positioned to challenge General Motors (GM) for the U.S. sales lead.

At some large dealerships, demand continues to outstrip the trickle of arrivals. Longo Toyota near Los Angeles has roughly 500 customers waiting six to eight weeks for a RAV4. In Vancouver, one buyer who placed a $1,000 deposit was told he was number 48 on the wait list, implying a wait of several months. Many RAV4s are spoken for before they reach lots, and some shoppers are withdrawing deposits to switch into vehicles they can obtain sooner.

The shortage stems from Toyota’s decision to keep producing the outgoing 2025 RAV4 well into the fourth quarter, delaying factory retooling for the overhauled 2026 model. Two Ontario plants that build the RAV4 produced few units in January and February while undergoing major retrofits for the sixth-generation, hybrid-only version. A planned phaseout of RAV4 production at Toyota’s Kentucky plant was reversed, contributing to a late start there on the new model.

Toyota’s factories in the U.S. and Canada have been running at or near full capacity since April, averaging more than 30,000 RAV4s per month. The company says this is effectively the limit of current capacity, leaving little ability to rebuild inventory. Georgetown, Kentucky, began producing the new RAV4 Hybrid in mid-2026 and was expected to add about 40,000 units this year, with a further Kentucky expansion planned for 2027.

For 2026, Toyota discontinued the gas-only RAV4, making every version a hybrid or plug‑in hybrid. This aligns one of America’s most popular vehicles with Toyota’s long-running hybrid strategy at a time when high fuel prices have pushed more buyers toward electrified powertrains. New RAV4s spend an average of just 17 days on dealer lots, versus an industry average above 70 days.

Tight supply has also distorted pricing dynamics. Used 2026 RAV4s have been transacting at average prices above the starting prices of equivalent new trims, while 2025 models are retaining about 99% of their value. Industry analysts have likened the situation to the chip shortage era, when constrained output drove intense competition for available vehicles.

Despite losing an estimated 104,600 RAV4 sales through September, Toyota has managed to grow its overall U.S. brand volume. Over the first nine months of the year, every other Toyota-brand model combined sold about 123,200 more vehicles than a year earlier, leaving the brand up 1.2%. RAV4 sales declines narrowed each quarter, from 48.1% in the first quarter to 16.0% in the third.

Toyota has encouraged dealers to steer frustrated RAV4 shoppers to alternatives such as the Corolla Cross, Crown Signia, 4Runner, bZ models, and the Tacoma pickup. Those nameplates recorded year-over-year gains ranging from 0.6% to 114% after the RAV4 shortage began, equating to roughly 1.18 incremental sales for every RAV4 sale that disappeared. Even so, Toyota has indicated it will not match last year’s record results, and the RAV4 shortfall complicates its effort to overtake General Motors (GM) in the U.S. market.