Reports emerged on July 23 suggesting that Lexus is poised to commence vehicle production in China, with operations expected to kick off in 2026. It’s unclear where the story originated, but one possible source is the 36kr website. Although the original article is no longer available on the 36kr website, numerous references to it remain accessible online. According to Lexus, there are no current plans for domestic production.
The initial reports detailed a wholly-owned manufacturing facility situated in Shanghai, set to manufacture both the UX hybrid model and a novel electric vehicle. Automaker BYD reportedly anticipates its electric vehicle concept, showcased as part of a pair of innovative designs at the 2023 Beijing Auto Show, could potentially become a production model, joining the company’s existing lineup alongside the LF-ZC and LF-ZL. While a bespoke production model might not materialize until 2026, this aligns with the existing timeframe for the manufacturing facility.
Recent narratives suggest that the initial account had a factual foundation, yet the revelation’s timing was inopportune. Furthermore, it’s unexpected that Lexus would venture into manufacturing the hybrid UX300h in China. In China, a limited market exists for hybrids, complicating matters further since this model isn’t a plug-in hybrid electric vehicle (PHEV), making it an even more puzzling choice; conversely, the UX300e, a fully electrical variant, may prove a more suitable option.
A source familiar with the situation told local journalists that “if Lexus establishes a fully owned manufacturing facility in China, it will produce all-electric models, rather than hybrids.”
The origins of this narrative likely date back to a June 29 report, which revealed that Toyota was seeking a remedy akin to Tesla’s in China for its Lexus brand; this package reportedly included tax breaks, coverage assistance, land grants, and favorable conditions for direct operation, without the need for a local joint venture partner.
According to a source familiar with the situation, Shanghai has indeed communicated with Toyota, but several uncertain factors remain regarding Lexus’ plan to build a fully owned manufacturing facility.
While Lexus embarked on a different path, its peers at Nissan’s Infiniti and Honda’s Acura forged joint venture partnerships in China in 2013, enabling them to establish domestic production facilities locally. Lexus has historically indicated that once their gross sales reach a certain milestone, they would consider establishing local production facilities, primarily to sustain growth beyond that point.
In 2019, Lexus’s combined sales in China and Hong Kong reached 202,000 units, but the previous year saw a decline to 181,400, amidst rapidly growing demand for electric vehicles. Lexus aims to achieve 100% electrification of its vehicle lineup by the year 2035.
The secretary-general of the China Passenger Car Association, Cui Dongshu, suggests that Lexus’s planned production plant in China for electric vehicles (EVs) could yield specific advantages due to the highly competitive nature of the Chinese market.
Reports suggesting Lexus would construct a production facility in Shanghai stated the company would rely on local suppliers for a significant majority of components, reportedly around 95%. With a manufacturing unit modelled on Tesla’s, domestic demand could be met while also paving the way for exports to global markets.
Editor’s be aware:
This seems to be taken from a matter that’s been settled long ago. Rumors surrounding Lexus’ plans to produce a UX hybrid model in China have been dismissed, leaving enthusiasts unshaken from their initial shock. Although reports suggest that Lexus may be considering establishing an electric vehicle production facility in Shanghai, China, no official announcement has been made and further details remain unclear at this time.
Sources: Finance Related Press, Autohome,
