Toyota breaks ground on the first independent Lexus EV plant in China

Toyota is finally getting into the game in the world’s largest EV market. On Friday, Toyota officially broke ground on the new Lexus EV plant in Shanghai, its first fully owned manufacturing facility in China and the second in the region, following Tesla.

Toyota is building a new Lexus EV plant in China

After officially announcing it would open a wholly-owned EV plant in China to build new energy vehicles (NEVs) for its luxury Lexus brand in February, Toyota is already kicking off construction.

Toyota finalized a deal with the Shanghai government on April 22 to build the facility. Just over two months later, the company is making swift progress in what’s being called “Lexus speed” locally.

The facility, which spans roughly 1.13 million square meters, could be one of Toyota’s most important to date. Following Tesla, which broke ground on its Shanghai Gigafactory in early 2019, Toyota is the second foreign automaker to construct a wholly owned auto plant in Shanghai.

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Construction is expected to be completed in August 2026, with production set to commence in 2027. According to local news outlet The Paper, the facility will be capable of producing up to 100,000 NEVs annually.

Although Toyota will use the new standalone Lexus plant to accelerate EV output, it will also be used to develop vehicles tailored to local buyers.

Since the plant is overseas in Shanghai Bay Area Hi-Tech Zone, Toyota established a “two-line collaboration,” which will enable “24-hour uninterrupted work.”

The first Lexus electric vehicle is scheduled to roll off the assembly line in 2027. Much like for Tesla, local authorities are providing generous support.

For example, the Jinshan District Investment Promotion Office introduced an “order-based” business agreement, addressing Toyota’s “demand list” in advance.

Electrek’s Take

Toyota will use the new Lexus plant as it looks to keep pace with BYD and other domestic EV leaders in China. After launching several new vehicles over the past few months, the Japanese automaker is already starting to gain some traction.

After launching the bZ3X in March, Toyota’s electric SUV was the best-selling foreign EV in China in April, its second month on the market.

Toyota’s electric SUV already outsold the Volkswagen ID.3, ID.4 Crozz, and BMW i3. The bZ3X is Toyota’s most affordable EV, launched in China with a starting price tag of just 109,800 yuan, or about $15,000.

Earlier this month, Toyota launched another electric SUV, the bZ5. The bZ5 is about the size of Tesla’s Model Y, but costs about half as much in China, starting at 129,800 yuan ($18,000).

These electric SUVs are significantly more advanced and feature-rich than the Toyota vehicles we’re accustomed to seeing. They feature advanced smart driving tech, massive touchscreens, and some added bonuses like a built-in refrigerator.

During its EV Tech Day event earlier this month, Toyota’s joint venture, GAC Toyota, announced partnerships with several “car industry bigwigs,” including Huawei, Xiaomi, and Momenta.

Can Toyota keep pace in China with an intensifying EV price war and influx of new low-cost domestic rivals? So far, the new vehicles are helping.

In April, Toyota’s sales in China increased by 20% compared to the same period last year, with 142,754 vehicles sold. Through May, Toyota’s sales are up 7.7% with 530,000 vehicles sold.

Source: The Paper