As some of North America’s biggest automakers pull back from Canadian factories, Toyota is making a notably different decision: keeping production of its newest Lexus SUV in Ontario.
The Japanese automaker is preparing to begin production of the updated 2027 Lexus NX hybrid in Cambridge this December, reinforcing its long-standing commitment to Canadian manufacturing. The decision comes as General Motors, Stellantis, and Ford have reduced, suspended, or substantially revised production plans at several Ontario facilities.
Toyota’s investment represents more than another vehicle launch. Its Canadian factories produce hundreds of thousands of vehicles annually, employ thousands of workers, and supply dealerships throughout North America.
With U.S. tariffs threatening Canada’s automotive industry and competition from Chinese manufacturers intensifying, Toyota’s decision offers a contrasting example of how a global automaker is approaching manufacturing north of the border.
Toyota Confirms the New Lexus NX Will Be Built in Cambridge, Ontario
Toyota Motor Manufacturing Canada is preparing to begin production of the updated Lexus NX hybrid in December 2026 at its Cambridge, Ontario, manufacturing complex. The vehicle is part of the significantly revised 2027 Lexus NX lineup, which was officially introduced in September. The decision extends an important relationship between Lexus and Canadian manufacturing, particularly at a time when several competitors are reconsidering their production commitments. Toyota’s Cambridge operation already builds the Lexus RX and NX alongside the Toyota RAV4, making it a significant part of the company’s North American vehicle supply network.
The distinction between different versions of the new NX is important. Lexus has confirmed that the 2027 lineup will consist entirely of electrified vehicles, offering conventional hybrid and plug-in hybrid powertrains. However, only the regular NX hybrid is confirmed for production in Cambridge, while the plug-in hybrid versions will be manufactured at Toyota Motor Kyushu in Japan. This division reflects Toyota’s use of multiple international production facilities rather than an entirely Canadian manufacturing program. Nevertheless, assigning the updated hybrid model to Cambridge ensures that Ontario remains involved in the next phase of one of Lexus’ important luxury crossover nameplates.
Ontario’s Toyota Plants Remain Among Canada’s Busiest Vehicle Factories
Toyota’s commitment carries considerable weight because of the scale of its Canadian operations. In 2025, Toyota Motor Manufacturing Canada produced 537,518 vehicles across its Ontario facilities, making it the country’s largest vehicle manufacturer by production volume. Approximately 85% of its output is intended for export, primarily to the United States. The company operates two assembly plants in Cambridge and a third facility in Woodstock, roughly 48 kilometres away. Together, these operations employ more than 8,500 workers and form an important manufacturing network supporting the production of Toyota and Lexus vehicles.
The Cambridge North plant manufactures the RAV4 and Lexus NX, while Cambridge South concentrates on the Lexus RX. Woodstock produces additional RAV4 models. Toyota’s corporate affairs director, Scott MacKenzie, told Bloomberg that the company’s Canadian factories operate two full shifts with regular overtime, reflecting strong demand and high utilization. Rather than maintaining large amounts of unused manufacturing capacity, Toyota is using its Ontario facilities intensively. This provides stability for employees, parts suppliers, and surrounding communities, although sustained production ultimately depends on demand and the economics of exporting vehicles across the U.S. border.
The 2027 Lexus NX Introduces Major Hybrid and Technology Improvements
The newest Lexus NX is more than a routine cosmetic update. For 2027, Lexus is eliminating conventional gasoline-only versions in favour of hybrid and plug-in hybrid powertrains. The redesigned hybrid system incorporates a more compact electric drive assembly, upgraded power electronics, and improved battery management. Lexus has also revised the all-wheel-drive system, allowing the rear electric motor to provide more consistent assistance. Changes to the suspension, steering, brakes, and structural rigidity are intended to improve handling and comfort, particularly over uneven roads and during everyday driving.
Inside, every 2027 NX will feature a standard 14-inch Lexus Interface touchscreen and Lexus Safety System+ 4.0, incorporating updated driver-assistance technologies. Available features include a multisensory cabin system that coordinates lighting, audio, temperature, and fragrance. The plug-in hybrid versions will offer DC fast-charging capability and a manufacturer-estimated electric driving range exceeding 64 kilometres on select grades. However, those plug-in models will be assembled in Japan rather than Ontario. Canadian pricing and final Natural Resources Canada fuel-efficiency ratings have not yet been announced, meaning buyers must wait for additional details before comparing ownership costs with the outgoing model.
Toyota’s $1.1 Billion RAV4 Investment Strengthens Its Canadian Commitment
The new Lexus NX follows another major manufacturing milestone for Toyota in Ontario. In January 2026, the company began producing the sixth-generation Toyota RAV4 in Woodstock after investing more than C$1.1 billion in the redesigned crossover. Toyota reported that this program brought its cumulative Canadian investment to more than C$12 billion. The new RAV4 is offered exclusively with electrified powertrains, continuing the manufacturer’s gradual shift toward hybrid technology. Toyota has also invested hundreds of millions of dollars in preparations for the updated Lexus NX, according to Bloomberg’s October 16 reporting.
These investments are particularly significant because they involve new product generations rather than simply maintaining existing assembly lines. Automakers typically must modify tooling, production equipment, employee training, and supplier arrangements when introducing substantially updated vehicles. Toyota has now committed additional capital to two important crossover nameplates while competitors have suspended or redirected some Canadian manufacturing projects. The company also benefits from nearly four decades of vehicle production experience in Ontario, giving it an established workforce and supplier network. Although future tariffs could affect production decisions, the latest investments demonstrate that Toyota continues to see commercial value in its Canadian manufacturing operations.
General Motors Cuts Oshawa Production and Ends Electric Van Manufacturing in Ingersoll
General Motors has taken a different approach to its Ontario manufacturing operations. In February 2026, the company eliminated the third shift at its Oshawa Assembly plant, returning the facility to a two-shift production schedule. GM stated that approximately 500 employees would be placed on layoff as part of the adjustment. The Oshawa plant continues to produce Chevrolet Silverado pickup trucks, and the company has announced a C$280 million investment to prepare for the next generation of gasoline-powered full-size pickups. Nevertheless, the elimination of a production shift represents a meaningful reduction in manufacturing activity and employment.
The situation in Ingersoll has been more severe. In October 2025, GM announced the permanent discontinuation of its BrightDrop electric delivery van after production at the CAMI Assembly plant had been suspended since May. The automaker cited weaker-than-expected commercial electric van demand, regulatory changes, and the elimination of American tax credits as factors behind the decision. GM said it would assess future opportunities for the facility, but no replacement vehicle program was confirmed in that announcement. For affected employees and suppliers, the uncertainty surrounding Ingersoll contrasts sharply with Toyota’s decision to keep introducing updated models at its established Ontario factories.
Stellantis Faces a Brampton Plant Crisis Despite Continued Windsor Investment
Stellantis has experienced one of the most contentious manufacturing disputes in Canada’s automotive industry. Its Brampton Assembly plant has been idle since December 2023, initially to accommodate preparations for a new Jeep Compass. However, the company paused retooling in 2025 and subsequently redirected the planned vehicle production to Illinois. More than 2,200 union members have been on layoff, according to Unifor. The situation deteriorated further in September 2026 when Stellantis confirmed a memorandum of understanding with Canadian defence manufacturer Roshel concerning a potential sale of the facility. That agreement does not mean the sale has been completed.
The situation is more complicated because Stellantis has simultaneously invested in its Windsor Assembly plant. In February 2026, the company added a third production shift, supporting manufacturing of Dodge Charger models and Chrysler minivans. However, Unifor Local 444 subsequently reported plans for a three-week production shutdown beginning October 19, citing tariffs and vehicle volumes. Contract negotiations have also reached an impasse, with strike authorization voting scheduled for October 17 and 18. These developments illustrate the uneven nature of Stellantis’ Canadian operations: one plant gained production and jobs, another faces an uncertain future, and trade tensions continue to threaten manufacturing schedules.
Ford Changes Direction in Oakville, Abandoning Its Original Electric SUV Plan
Ford’s Oakville Assembly Complex provides another example of how changing market conditions are reshaping Canadian manufacturing. The automaker originally intended to transform the facility into a centre for next-generation electric SUVs. However, in July 2024, Ford changed direction and announced plans to manufacture F-Series Super Duty pickups instead. The company originally allocated approximately US$2.3 billion to the Oakville assembly and stamping conversion, with eventual annual capacity projected at up to 100,000 trucks. Ford also anticipated supporting approximately 1,800 Canadian jobs through the program, making the decision an important manufacturing commitment despite the abandoned electric SUV plan.
By September 2026, Oakville had produced 903 Super Duty trucks during the year, including 300 that month, according to production figures reported by Ford Authority. These vehicles were part of the plant’s early production and validation activities rather than evidence of full-scale commercial manufacturing. The transition has involved a lengthy retooling period and workforce disruptions, with full-volume production still ahead. Ford’s approach therefore differs from both GM’s factory reductions and Toyota’s continued crossover production. Oakville is receiving a new manufacturing assignment, but it represents a substantial change from the electrification strategy originally promised to workers and government officials.
U.S. Tariffs Are Putting Canada’s Automotive Manufacturing Model Under Pressure
The growing uncertainty surrounding Canadian auto production is closely connected to deteriorating trade relations with the United States. Canadian-made vehicles have faced U.S. tariffs of 25% on their non-American content when qualifying under CUSMA, adding costs to a manufacturing system built around cross-border trade. In August 2026, President Donald Trump threatened to increase tariffs on Canadian vehicles and automotive parts to 50% beginning January 1, 2027. That proposed increase has created additional uncertainty for manufacturers deciding where to invest. Even Toyota has acknowledged that substantially higher tariffs could force it to reconsider its current production pace.
Ottawa has responded by tying tariff relief for imported American vehicles to continued Canadian manufacturing commitments. In October 2025, the federal government reduced General Motors’ annual tariff-remission quota by 24.2% and Stellantis’ by 50% following their production decisions. The framework was subsequently renewed for another year, running through April 2027. The stakes are considerable: Canada’s automotive industry supports more than 125,000 direct jobs, while Statistics Canada estimates that American demand accounted for 76.4% of Canadian automobile and light-duty vehicle manufacturing payroll jobs in 2024. Toyota’s continued investment offers reassurance, but the sector remains heavily dependent on maintaining access to American consumers.
Strong Hybrid Demand Helps Explain Toyota’s Confidence in Ontario
Toyota’s Canadian manufacturing decisions are supported by strong demand for electrified vehicles. During the first nine months of 2026, Toyota Canada sold a record 130,369 electrified vehicles, surpassing its previous full-year record of 123,879 vehicles set in 2025. The company sold 40,019 electrified vehicles during the third quarter alone, representing approximately 65.7% of its total Canadian sales. Lexus also performed strongly, reporting 9,127 vehicles sold during the quarter, an 18.5% year-over-year increase. The NX family recorded its best third quarter and September sales results, suggesting that the compact luxury crossover continues to resonate with Canadian buyers.
These numbers provide an important explanation for Toyota’s manufacturing strategy. Rather than relying entirely on battery-electric vehicles, the company has developed a broad lineup of conventional hybrids, plug-in hybrids, and fully electric models. Conventional hybrids can reduce fuel consumption without requiring owners to recharge from an external source, an attractive arrangement for households without convenient charging access. Plug-in hybrids offer additional electric-driving capability for buyers who can charge regularly. Toyota’s latest RAV4 and the upcoming Lexus NX reflect this broader approach. However, the strong 2026 sales results relate to existing products and cannot guarantee that the redesigned 2027 NX will achieve the same performance.
Ontario’s Lexus Manufacturing Success Faces Its Next Major Test
Toyota’s decision to keep the new NX hybrid in Cambridge builds on a manufacturing history that began decades ago. In 2003, the company started assembling the Lexus RX in Ontario, making it the first Lexus vehicle manufactured outside Japan. Production of the Lexus NX followed in 2022, establishing Cambridge as the only manufacturing location outside Japan producing two Lexus nameplates. In December 2025, Toyota celebrated the production of its two-millionth Canadian-built Lexus RX. The company has also accumulated 24 plant quality awards since 1991, underscoring the manufacturing expertise developed by its Ontario workforce.
For Canadian workers, the updated NX represents something more substantial than a redesigned luxury SUV. A new production program helps maintain demand for assembly workers, equipment technicians, logistics providers, and automotive parts suppliers. For consumers, it provides another example of a premium vehicle manufactured domestically, although final pricing and delivery details remain to be announced. The larger question is whether Toyota can sustain its current production levels if trade conditions deteriorate further. With competing manufacturers reducing, relocating, or reconsidering Canadian operations, Toyota’s next Lexus launch has become an important measure of Ontario’s continuing competitiveness as an automotive manufacturing centre.
