Toyota Motor Corporation has reportedly decided to establish a new factory in Shanghai, China, dedicated to producing electric vehicles (EVs) under its luxury Lexus brand, according to a report by the Nikkei business daily on Monday.
This initiative marks a significant departure from Toyota’s existing approach in China, where it has traditionally operated through joint ventures with local manufacturers. The new plant will be owned and operated independently by the Japanese automaker, signalling Toyota’s increasing commitment to strengthening its presence in the world’s largest EV market.
Sources cited by the Nikkei suggest that Toyota plans to commence operations at the new facility by around 2027. The decision to produce the Lexus brand reflects Toyota’s strategy to target the growing demand for premium electric vehicles in China, where domestic and international competition in the EV segment is intensifying.
When approached for comment, a Toyota spokesperson stated that the company had not made any official announcement regarding the reported plans. The spokesperson did not provide further details on whether the project aligns with Toyota’s existing EV expansion initiatives.
China remains a critical market for automakers transitioning to electrification, given the country’s robust government support for EV adoption and rapidly expanding consumer base. Toyota’s reported move to build an independently operated plant underscores the company’s recognition of the need to adapt to China’s unique market dynamics and regulatory environment.
The planned Shanghai factory could help Toyota streamline its production processes, improve its supply chain efficiency, and gain a more direct foothold in a competitive EV sector dominated by both domestic players and global competitors.
If confirmed, the project would be a significant step forward in Toyota’s broader electrification strategy, which has been criticised for lagging behind rivals like Tesla and BYD. With the global EV market evolving rapidly, this reported initiative may position Toyota to capture a larger share of the Chinese market, where demand for environmentally friendly vehicles continues to surge.
As of now, details regarding the factory’s production capacity, investment scale, and specific model plans remain undisclosed. Further official confirmation from Toyota is awaited.