Toyota Invests $3.6 Billion to Move Tacoma Production from Mexico to San Antonio, Creating 2,000 Jobs

Toyota Motor North America announced Monday, July 6, 2026, that it will invest $3.6 billion to expand its San Antonio manufacturing campus with a second vehicle assembly line, shifting Tacoma midsize pickup production from its Baja California plant in Mexico to Texas over an approximate four-year period.

The expansion will add roughly 2.5 million square feet to the existing 2.7-million-square-foot facility, nearly doubling the plant's size by 2030, according to Toyota's official press release. Annual production capacity will grow from approximately 200,000 to 350,000 units.

The Jobs Picture

Toyota says the project will create 2,000 new jobs. According to filings with the Texas State Comptroller's Office reported by the San Antonio Report, the hiring will be phased: 320 workers in 2028, 1,440 in 2029, and 240 in 2030. Construction is expected to begin this year.

The plant currently produces the Tundra full-size pickup and Sequoia SUV hybrid. A $531 million rear axle plant on the same campus is already nearing startup, according to CNBC.

What Texas Paid to Get It

The deal did NOT happen in a vacuum. The San Antonio Report documented that Texas, Bexar County, and the City of San Antonio assembled an incentive package worth at least $303 million, covering property tax abatements, infrastructure commitments, and grants. Governor Greg Abbott cited support from the Texas Enterprise Fund and the JETI program in his statement Monday.

The incentives come with real strings. Toyota must pay workers at least $32.46 per hour, equivalent to Bexar County's average annual wage, as a condition of the city's tax abatement. Ten percent of the savings from that abatement must fund worker training, transportation, or child care, per the San Antonio Report.

Texas got the deal over undisclosed competitors. Toyota confirmed in its state incentive application that confidential information about rival sites was submitted, but neither Toyota nor public officials have named those locations.

Mexico Is NOT Being Abandoned

Toyota spokeswoman statements to CNBC make this clear: the company is maintaining operations in Mexico. Tacoma production transfers only from the Baja California (Tijuana) plant. Toyota's Guanajuato plant will continue producing Tacomas, and the company says it remains committed to its full North American production network in the U.S., Canada, and Mexico.

Toyota moved Tacoma production out of San Antonio to Mexico in 2021, just five years ago. The reversal follows the Trump administration's decision, announced in late June, not to extend the trilateral USMCA trade agreement and instead conduct annual reviews, which raised the cost calculus on Mexican manufacturing, according to CNBC.

The Legitimate Concern About Incentive Deals

Critics of large corporate incentive packages raise a fair point: taxpayers in San Antonio and across Texas are committing $303 million to a company that already had profitable reasons to expand domestically. When governments compete with public money to attract private investment, the risk is that corporations play jurisdictions against each other, capturing subsidies they would have earned anyway. The counter-argument, and it has merit, is that the job-quality requirements attached here—a $32.46 hourly wage floor and mandatory workforce development spending—convert what could be a blank check into a structured community benefit. Whether the net fiscal return justifies the upfront cost depends on how many of those 2,000 jobs stay, what the workers actually earn in total compensation, and how long Toyota remains committed to the facility beyond the incentive compliance window. None of those figures are settled yet.

Competitive Implications

The expansion fits Toyota's stated plan, announced in 2025, to invest $10 billion more than previously expected in U.S. manufacturing through 2030. With hybrids gaining market share and all-electric vehicles underperforming sales projections, Cox Automotive projects Toyota will narrow the U.S. sales gap with General Motors this year. Closing on GM's domestic volume would make Toyota North America's top-selling automaker.

Toyota's North American CEO Ted Ogawa said the San Antonio expansion reflects confidence in the region's workforce and long-term growth potential.

The Open Question

The new Tacoma line is scheduled to begin operations in 2030, according to Toyota's global corporate newsroom. That is four years away, and the incentive package's long-term conditions will require ongoing monitoring by San Antonio and Bexar County officials. Whether Toyota maintains the Guanajuato Tacoma line indefinitely or eventually consolidates that production into Texas, too, remains an open question the company has not answered.