For nearly a decade, one SUV has done something no car in America, outside of a full-size pickup, has managed to do: sell close to half a million units a year without breaking a sweat.
Then its maker ripped out its engine, rebuilt it from scratch, and watched sales fall off a cliff.
What happened next is one of the more dramatic market pivots in recent automotive history, and the gap it is now closing at the top of the U.S. sales charts is one that has stood for most of a century.
America’s most popular SUV had a quiet record that most buyers never noticed
In the United States, the RAV4 is the best-selling vehicle that is not a pickup truck, and it set its all-time annual record in 2025. Even as the fifth-generation version was wrapping up, it managed 479,288 units sold in 2025, more than some entire brands, and it happened without big discounts or last-minute deals.
The popularity of the RAV4’s electrified models had continued to grow, with the standard hybrid and plug-in hybrid together making up about half of the vehicle’s total U.S. sales.
That momentum gave Toyota an opening to do something no mainstream compact SUV maker had dared attempt at volume scale.
For the 2026 model year, Toyota moved to a 100% electrified lineup, offering only hybrid or plug-in hybrid models in the new, sixth-generation RAV4.
The sixth-generation redesign dropped everything buyers thought they knew about the vehicle
The 2026 RAV4 is a ground-up redesign that drops the gas-only powertrain entirely, with the standard hybrid producing 226 combined horsepower in front-wheel-drive form and the plug-in hybrid stepping up to 324 horsepower with an EPA-estimated 54 miles of all-electric range on the SE trim.
The hybrid front-wheel-drive model is priced in the low $30,000 range, placing it squarely in a market where, as GCN has reported, new car prices just broke a three-year record.
Toyota had not yet ramped up its plant in Kentucky to build the new model; early 2026 RAV4 VINs showed the vehicles were built in Japan or Canada.
Hybrid models began arriving in winter 2025, with plug-in hybrid models slated for spring 2026.
Then the sales numbers arrived, and the scoreboard looked like a typo
RAV4 first-quarter sales declined by 48.1% to 59,869 units, down from 115,402 units in the same quarter last year.
The drop was so severe that the Nissan Rogue beat the RAV4 in quarterly sales for the first time in the model’s history.
RAV4 sales dropped 47.7% in March alone amid new-model production constraints, and the Camry became Toyota’s top seller for the month.
The reason, according to Toyota’s own dealer communications, was not demand. It was supply.
A Toyota spokesperson confirmed that “RAV4 volume was impacted by the model changeover to the all-new model,” saying that “as is typical during a transition like this, production and availability can be affected as manufacturing shifts from the outgoing model to the new one.” Toyota was retooling its Kentucky plant for the all-new sixth-generation RAV4 and running on inventory from Japanese and Canadian plants in the meantime, and those plants simply could not meet demand.
As GCN has covered, hybrids now account for a record share of U.S. new-car sales, making the timing of the RAV4’s all-hybrid pivot either perfect or painfully premature depending on which quarter you examine.
The production squeeze did something nobody expected at the very top of the U.S. sales chart
Here is the real consequence of the RAV4 stumble, and it is bigger than one model’s quarterly dip.
General Motors remained the volume leader, reporting second-quarter sales of 714,896 vehicles, down 4.2 percent. In Q1 2026, GM posted a more severe 9.7% drop to 626,429 units, while Toyota held near-flat at 569,420 units, down just 0.1%.
Toyota’s momentum is building: second-quarter TMNA sales reached 673,971 vehicles, up 1.1 percent year over year, with electrified vehicles accounting for 56.8 percent of total sales volume in the quarter.
While Toyota and Hyundai saw strong growth driven by hybrid demand, General Motors experienced a 4.2% sales decline, and Cox Automotive noted that the Japanese automaker is notably narrowing its difference in sales with the Detroit carmaker. GM sold a total of 714,895 vehicles in Q2 and 1,341,325 in the first half of 2026, leaving Toyota’s first-half total trailing by less than 100,000 units, setting up a potential leadership shift by year-end if trends hold.
Toyota last held the U.S. volume crown in 2021, edging past GM for the first time in roughly 90 years.
