This narrative really needs to be put to rest. I don't buy for a moment that the MK1 was produced at a loss. It seems more like a marketing myth concocted by someone close to Toyota, and everyone just went along with it.
I haven't encountered a single undeniable piece of evidence proving that the MK1 was sold at a loss. Without solid proof, this claim holds no water. The GR Yaris isn't the LFA. And even the story about the LFA being sold at a loss is questionable.
There ought to be a pinned post on the forum clarifying that the GR Yaris has not been proven to be sold at a loss, because, as it stands, such a claim is unsubstantiated. Sadly, most people regard it as fact.
While it's always impossible to 100% prove it, sometimes it happens that a product could be initially sold at a loss for some plausible reason.
Maybe to open a new market sector (or re-open it, like it could be the case for the GRY), or because you need to sell a minimum number of cars at any cost.
It happened at the Group-A era in Rallies, where manufacturers had to sell a minimum number of standard cars to get the homologation of the Group-A rally cars.
I remember in 2020 that while there were great expectations about the Mk1 from a (minority) part of the market, at the same time there also were many doubts about its actual success potential, and about how it would age through the years.
Before the Rally1 regulations came suddenly in force, Toyota had to respect the 25000 minimum threshold of GRYs produced, and in the era of sustainability and increasing push to low emissions, I guess that Toyota wasn't so confident about selling all of them in a reasonable time.
So in that scenario I think that it's not so unlikely that Toyota could have decided to sell it at a very tiny profit, if not at a cost.
I've heard of a total GRY project cost (included tests, research, and every thing) of around $4billions, and if you multiply 25000 cars by an average of, say, $40000, you get a total of $1billion, with a loss of $3billions.
These are the figures that Toyota declared, so we won't ever have a definite proof about them.
But the same Toyota stated that the "dragging effect" caused by the motorsport successes, and by the market success and enthusiastic reviews of the Mk1, gave a huge marketing and brand return that, once translated in real money, was by far larger than the initial loss on the project.
But of course we won't ever know if these figures are true, exaggerated, or simply untrue.
What gave me some hints about the Mk1 being a great bargain are simple and verifiable things, like the forged wheels, for instance.
They came included with the Circuit version of the Mk1, and when I heard the after-market price of them, I was left literally speechless

Hence it doesn't come as a surprise that for the Mk2 they are now offered only as an expensive optional on most of the markets.