Toyota Is Building a New Lexus EV Plant in China
Toyota has officially commenced construction on its highly anticipated new Lexus electric vehicle (EV) plant in Shanghai, marking a significant milestone as the second international automaker to establish an entirely owned assembly facility in China following Tesla. The groundbreaking decision was finalized just over two months ago when Toyota secured a deal with the Shanghai authorities for land acquisition.
The extensive site, spanning approximately 1.13 million square meters, is poised to become one of Toyota’s most crucial manufacturing assets. Construction is expected to be completed by August 2026, with production set to begin in early 2027 and an estimated capacity of up to 100,000 NEVs annually.
Beyond producing Lexus EVs, the strategic location within Shanghai Bay Space Hi-Tech Zone will also enable the development of vehicles tailored specifically for Chinese consumers. Toyota’s implementation of a “two-line collaboration” system is expected to facilitate continuous production by allowing for seamless coordination and 24-hour uninterrupted work.
The first Lexus electric sedan was scheduled to begin production in 2027, further cementing its commitment to electrification under the iconic luxury brand. This new venture follows similar successful strategies employed with Tesla’s Gigafactory establishment earlier last year.
Toyota is strategically positioning itself within China’s rapidly evolving EV landscape. The company has recently launched several competitive models including the bZ3X electric SUV and the more affordable bZ5, which rivals Tesla’s Model Y in size but comes at approximately half its price point of $18,000 (starting around ¥129,800).
These new EVs have demonstrated impressive market success. In April, Toyota’s sales in China jumped by 20% compared to the same period last year, with nearly 143,000 vehicles sold during that month alone.
Toyota is responding proactively to competition from both international players and domestic Chinese EV leaders like BYD. The company has expanded its partnerships significantly through collaborations with major tech companies including Huawei, Xiaomi, and Momenta at its recent GAC Toyota EV Tech Day event.
While China’s EV market intensifies with lower-priced models from established automakers and influx of new competitors, this strategic investment suggests Toyota is determined to maintain its competitive standing in the Chinese automotive landscape.
