Dec. 26, 2025 | Automaker Year-In-Review: Toyota and Subaru navigate a changing landscape
About this episode
A deep dive into Toyota and Subaru's performance in 2025 reveals Toyota's dominance with the RAV4 leading hybrid sales and a strategic pivot to hybrids and plug-in hybrids. The discussion highlights Toyota's disciplined inventory management, which has led to record dealer profits. Subaru, on the other hand, focuses on its redesigned Outback and a new facilities program aimed at enhancing dealer compliance and market share. The episode also touches on the challenges of chasing market share and the evolving landscape of the automotive industry.
Daily Drive's year-end series continues with a look at Toyota and Subaru's 2025. Automotive News Toyota reporter Larry P. Vellequette and Atlanta Bureau Chief Urvaksh Karkaria discuss Toyota's electrification strategy throughout the year and how the world's largest automaker adapted to shifting market demands. Plus, a look at Subaru's performance in 2025.
ZEV states
"[89.8s] Otherwise, they, when they were called prime... and then plug-in hybrids are going to be available nationwide. They were confined to zevstates."
ZEV states are places in the U.S. that want cars with no exhaust emissions, so car makers sell more electric or hybrid models there.
Zero‑Emission Vehicle (ZEV) states are U.S. regions that require automakers to sell a certain percentage of zero‑emission vehicles.
Lexus
"And to go along with that record dealer profits. Every Lexus dealer is making more money than they know what to do with it."
Lexus makes high‑end cars that are often more expensive than regular Toyota models. They’re famous for comfort and reliability.
Lexus is the luxury vehicle division of Toyota Motor Corporation, known for its upscale models and strong resale value.
inventory
"And why are they doing while they're doing well because the inventories are tighter. Their dealers don't have all these carrying costs"
Inventory means the cars that a dealership has ready to sell. If they have fewer cars, they spend less money keeping them there.
Inventory in automotive terms is the stock of vehicles that a dealership has on hand for sale. Lower inventory can reduce holding costs and improve profitability.
record profits
"That's why the entire industry had record profits in 21 and 22 coming out of it."
Record profits mean the company made more money than ever before. This usually happens when many cars are sold or costs are low.
Record profits indicate that a company earned more money in a given period than at any previous time, often due to high sales or low costs.
incentives
"We don't have to do incentives. Everybody's making more money..."
Incentives are like extra money or discounts that help people buy cars. Dealerships use them to make sales faster.
Incentives are financial bonuses or discounts offered by manufacturers to dealerships or consumers to encourage vehicle sales.
hybrids
"Now that's more expensive. If you look, I mean, I do the monthly inventory story for us every month right have for years. If you look, they're the only ones who maintained the discipline..."
Hybrids are cars that can run on gasoline and electricity. They use less gas than regular cars.
Hybrids are vehicles that use both an internal combustion engine and one or more electric motors to improve fuel efficiency.
BEV
"But if you're doing that and you actually give what you listen to your customers and you say, okay, you're not convinced to go BEV."
A BEV is a car that uses only electricity from batteries for power, so it doesn’t use gasoline and doesn’t emit exhaust gases.
BEV stands for Battery Electric Vehicle, a car that runs solely on electric power stored in batteries and produces no tailpipe emissions.
52 miles of gallon
"It's 52 miles of gallon. It's, and it's a comfortable package. It's a sedan, right."
It means the car can go 52 miles before it needs another gallon of fuel, which is very efficient for a gasoline car.
This refers to the vehicle’s fuel economy, indicating it can travel 52 miles on one gallon of gasoline (or equivalent energy).
plug-in option
"If you want that, they deliver that and it works. You will take care of it for it."
A plug-in hybrid can charge from a wall outlet, letting you drive on electric power for short trips before the gasoline engine kicks in.
A plug-in hybrid (PHEV) is a hybrid vehicle that can be charged from an external power source to extend its electric-only driving range.
all-wheel drive
"If you want that, they deliver that and it works. You will take care of it for it."
AWD means the car can send power to all four wheels at once, which helps it grip the road better in rain or snow.
All-wheel drive (AWD) is a drivetrain that powers all four wheels of a vehicle, improving traction and handling in various driving conditions.
Mitsubishi
"Does Japan need three automakers? Does the world need three, need, need all three Japanese automakers? Maybe that's the question. No, I wish it was only three. You forgot about Mazda and Subaru and Mitsubishi."
Mitsubishi makes cars that are often affordable and practical for everyday use.
Mitsubishi is a Japanese automaker known for models like the Outlander and Mirage, and its history in military vehicles.
Subaru
"Does Japan need three automakers? Does the world need three, need, need all three Japanese automakers? Maybe that's the question. No, I wish it was only three. You forgot about Mazda and Subaru and Mitsubishi."
Subaru makes cars that handle well in bad weather and are popular for outdoor adventures.
Subaru is a Japanese automaker famous for its all-wheel-drive vehicles and boxer engines.
Mazda
"Does Japan need three automakers? Does the world need three, need, need all three Japanese automakers? Maybe that's the question. No, I wish it was only three. You forgot about Mazda and Subaru and Mitsubishi."
Mazda makes cars that are fun to drive and often have good fuel economy.
Mazda is a Japanese automaker known for its rotary engines and recent focus on efficient, stylish vehicles.
rental car company
"Well, it depends on if you run a rental car company or not."
A rental car company lets people borrow a car for a short time, like when traveling or if their own car is in the shop.
A rental car company provides vehicles for temporary use, often offering a fleet of standardized models.
rental fleet
"I mean, hey, just go drive through the thrifty car lot. Oh, man, it's packed full of them."
A rental fleet is the group of cars a company has for people to rent.
A rental fleet is the collection of vehicles that a rental company offers to customers.
Dodge Charger
"[458.5s] The Dodge Charger."
The Dodge Charger is a big, sporty car from the U.S. brand Dodge. It’s famous for its strong engines and classic look.
The Dodge Charger is a full‑size, rear‑wheel drive sedan produced by the American automaker Dodge. It has been in continuous production since 1966 and is known for its powerful V8 engines and muscular styling.
Nissan
"[462.1s] And again, this comes back to the whole Nissan's, you know, mistaken strategy of pushing volume..."
Nissan is a car company from Japan that makes many types of cars, trucks, and SUVs.
Nissan is a Japanese automaker known for producing a wide range of vehicles, from compact cars to SUVs and trucks. The brand has a history of innovative engineering and global market presence.
Ford
"and this is exactly to my earlier point, this is exactly what GM and Ford and Chrysler went through"
Ford is a well-known car company that makes cars like the Mustang and big trucks.
Ford Motor Company is a historic American automaker famous for models such as the Ford Mustang and F-150 truck.
GM
"and this is exactly to my earlier point, this is exactly what GM and Ford and Chrysler went through"
GM is a big car company in America that makes many different kinds of cars, like Chevrolets and Cadillacs.
General Motors (GM) is one of the largest automobile manufacturers in the United States, known for brands like Chevrolet, Buick, and Cadillac.
Chrysler
"and this is exactly to my earlier point, this is exactly what GM and Ford and Chrysler went through"
Chrysler is a car company that makes cars and trucks, including the Dodge and Jeep brands.
Chrysler is an American automotive manufacturer known for brands like Dodge, Jeep, and Ram.
battery plan
"[597.2s] Toyota opened its first US battery plan outside Japan and North Carolina with a 13.9 billion dollar"
Toyota is building a place to make the batteries that power electric cars, so they can keep making those cars in America.
A battery plan is a strategic initiative to produce batteries for vehicles, often involving setting up manufacturing facilities and securing supply chains.
hybrid batteries
"And luckily for Toyota, they can switch between hybrid batteries and plug-in hybrid batteries"
In a hybrid car, the battery gives power to an electric motor. The car can use gas or electricity, so it saves fuel.
Hybrid batteries store electrical energy that powers the electric motor in a hybrid vehicle, allowing it to run on both gasoline and electricity.
EV
"you criticize Toyota for not going, not jumping in, not going in all EV, right?"
An EV is a car that uses electricity instead of gasoline. It charges from a wall or station and doesn’t emit exhaust.
EV stands for Electric Vehicle, a car that runs entirely on electric power stored in batteries, producing zero tailpipe emissions.
Tesla
"Why can't we be Tesla?"
Tesla is a company that makes cars powered only by electricity, instead of gasoline. They’re famous for sleek designs and fast acceleration.
Tesla, Inc. is an American electric vehicle and clean energy company known for its high-performance EVs and innovative technology.
General Motors
"Look at general motors."
General Motors is a big company that makes many different kinds of cars and trucks, like the Chevy Silverado or Buick Regal.
General Motors (GM) is a large American automotive manufacturer that produces cars, trucks, and SUVs under brands like Chevrolet, GMC, Buick, and Cadillac.
Volkswagen
"[706.5s] Volkswagen, right?"
Volkswagen is a car company from Germany that makes many popular cars, including electric ones.
Volkswagen is a German automotive manufacturer known for models like the Golf, Passat, and the electric ID series.
bespoke vehicles
"[852.9s] And these are both bespoke vehicles, right? [857.6s] Century historically have been handmade vehicles."
Bespoke means the car is made just for you, with special parts and design that match what you want.
Bespoke vehicles are custom-built cars tailored to a customer's specific preferences, often involving hand‑crafted components and unique design choices.
presidential limousines
"[862.2s] They're, you know, the presidential limousines in Japan."
A presidential limousine is a very fancy car that presidents use to travel. It’s usually extra safe and comfortable.
Presidential limousines are specially built luxury vehicles used by heads of state for official transport, often featuring enhanced security and comfort.
dealer facilities program
"From their dealer perspective, the big news this year was their facilities program that they got handed to them this fall."
This program helps car dealers improve their shops and showrooms by giving them money or support from the car company.
A dealer facilities program is a manufacturer‑led initiative that provides funding or incentives for dealerships to upgrade their service centers, showrooms, and other infrastructure.
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