Police said they were looking into his psychiatric history after he told officers as they arrested him he heard voices telling him to hurt someone, local media said.
One police source told the French news agency the driver "deliberately" tried to ram the students with his vehicle, one of whom is in serious condition. The incident occurred outside a college in the suburb of Blagnac.
Two of the injured are said to be in a serious condition.
The 28-year-old driver of the auto, known to the police for minor offences, was arrested at the scene, BFM TV reported. BBC quoted some unconfirmed reports that he may be suffering from major psychological problems.
The injured students, said to be aged 22 and 23, have been taken to hospital in Toulouse. As of now, there is no indication that it is an act of terrorism.
Initial information about the conditions of the injured - identified by authorities only as Chinese students - conflicted. It is not clear as of now whether it is a terrorist attack or not.
France has been victim of a series of vehicle attacks by extremists inspired by the Islamic State group.