Toyota Motor Corp. plans to establish a wholly-owned subsidiary in Shanghai to develop and produce electric vehicles and batteries for the Lexus brand. This initiative marks a turning point for the Japanese automaker, which will operate a plant in China for the first time without a local partner.
A first-ever Lexus plant in China
Toyota has signed a letter of intent with the Shanghai municipal government to establish the new plant in the suburban district of Jinshan. Production will start in 2027, with an initial capacity of 100,000 vehicles per year and a workforce of 1,000.
Until now, Lexus has imported its vehicles into China, while Toyota has produced models under its own brand via joint ventures with FAW Group and GAC Motor. This new plant thus represents a first for the local manufacture of Lexus vehicles in China.
Betting on innovation and the speed of the Chinese market
Toyota justifies its choice of Shanghai by highlighting local industrial expertise
In addition to producing electric vehicles, Toyota plans to collaborate with local companies to develop solutions in hydrogen, autonomous driving and battery recycling.
A key Chinese market for Lexus
In 2024, Lexus sold 181,906 vehicles in China, a figure stable compared with the previous year. With this local production, Toyota hopes to accelerate its foothold in the ultra-competitive Chinese market, dominated by players such as BYD and Tesla.
The plant will not only reduce import costs, but also enable Toyota to respond more rapidly to Chinese consumers' expectations in terms of electrification and new technologies.
Toyota is thus part of a dynamic in which innovation and adaptation to the Chinese market are becoming essential to maintain its place among the world's automotive leaders.