Toyota plans to build a factory in Shanghai to produce electric Lexus vehicles
In Shanghai, China, Toyota plans to begin production of a next-generation electric SUV under the Lexus brand at a new wholly owned plant at the end of 2027. As The Korea Herald reports, citing Nikkei, this could be the first time the automaker launches a flagship electric vehicle outside Japan.
Plant in Shanghai
The facility in Shanghai's Jinshan district is set to become the second electric vehicle plant in China wholly owned by a foreign company, after the Tesla Gigafactory. Investment in the project amounts to 14.6 billion yuan, or $2.17 billion, while initial annual production capacity is expected to reach 100,000 vehicles.
Initially, Toyota expects to produce about 1,000 vehicles per month, before increasing output to tens of thousands of vehicles a year after 2028. For Shanghai-made Lexus vehicles, the company also plans to use gigacasting for the first time — a technology in which several body components are replaced with large, single-piece aluminum castings. According to the publication, this could reduce the weight of body parts by up to 20%, increase driving range and simplify production.
Toyota also aims to reduce the vehicle development cycle from the traditional four to five years to two. More than 95% of the new model's components, including batteries, electric motors and software, are expected to be sourced from China.
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Different strategies of Toyota and Hyundai
Toyota's strategy is aimed at restoring its position in the Chinese market. In July, the company's sales in China fell by 24.3% year-on-year to 114,700 vehicles. Last year, Toyota sold about 1.78 million vehicles there.
Hyundai Motor Group has chosen a different approach: the company is developing localized electric vehicles through a joint venture with BAIC while also using Chinese production sites as a base for exports to Latin America, the Middle East and Southeast Asia. Hyundai has set a goal of increasing annual sales in China, including exports, to 500,000 vehicles by 2030.
The company is preparing the Ioniq V electric sedan for the Chinese market and plans to launch B- and C-segment SUVs in 2027 with fully electric and extended-range electric powertrains. For local models, Hyundai cooperates, among others, with CATL and Momenta.
