Toyota confronts a $1.2 billion tariff charge.

Toyota is facing a staggering $1.2 billion tariff bill, and that sum only includes tariff costs for April and May. The Japanese automaker released financial results on May 8, which the company said “tentatively factored in” the estimated costs of the Trump tariffs. In its FY2025 financial results, the company forecasted material costs for the coming year at 350 billion yen. However, this figure does not include an additional 180 billion yen for tariff impacts.

To put these numbers in perspective, Toyota reported a net profit for the year of $32.7 billion (through March). The $1.2 billion tariff bill would amount to 4 percent of the company’s profit. Overall, Toyota’s operating profit was down about 10.4 percent year over year, and the company forecasted a steeper decline of 21 percent in 2026.

The company also reported that electric vehicle sales now accounted for 46.2 percent of total sales, a “significant increase” driven largely by hybrid EVs like the Prius. The company sold an additional 850,000 EVs in the latest fiscal year, and it expects EVs to account for 50 percent of all sales in 2026, a major milestone. Across the world, current and potential Tesla drivers are turning away from the brand due to the controversial CEO, which could benefit companies like Toyota.

The financial report also acknowledges the uncertainty of the current financial moment. The hasty rollout of the Trump tariffs has caused much confusion and many price increases, highlighting “the difficulties in anticipating the business outlook due to the impact of U.S. tariff impacts and other factors.”

According to the Wall Street Journal, Toyota only included the April and May tariff impacts because the tariff situation is so “fluid.” The United States and Japan are actively negotiating the latter’s tariff rate. We reached out to Toyota for comment on the tariff situation, and we’ll update this report if we hear back.