Lexus, the premium brand of Japanese automotive giant Toyota, is making significant strides in the highly competitive electric vehicle (EV) market in China. The company has commenced construction on its EV factory in Shanghai, signaling its commitment to electrification and smart car technology.
The EV factory project, located in Jinshan district in southwest Shanghai, officially broke ground recently, with plans for completion in August 2026 and production set to begin in 2027. The facility will have an annual production capacity of up to 100,000 vehicles, catering to both the Chinese domestic and international markets.
Toyota aims to leverage this project to accelerate its transition towards electrification and smart cars, with a focus on launching EVs tailored to meet the demands of the rapidly evolving automotive landscape. The company’s decision to establish a wholly-owned car factory in China underscores its commitment to expanding its presence in the region.
The move makes Lexus the second foreign automotive brand, after Tesla, to establish a wholly-owned car factory in China. This development comes as China has relaxed restrictions in the pure electric vehicle sector, allowing foreign companies to operate wholly-owned entities and establish manufacturing facilities.
In a strategic move, Lexus acquired an industrial land plot in Jinshan district, spanning about 1.13 million square meters, for RMB 1.353 billion ($189 million). The land plot is approved for use in new energy vehicle (NEV) manufacturing, lithium-ion battery manufacturing, and other battery-related activities.
Furthermore, Toyota signed a cooperation agreement with Shanghai authorities to facilitate the project’s launch, highlighting the company’s commitment to leveraging local resources and expertise in driving its expansion in the Chinese market.
As the world’s largest automaker by sales volume, Toyota views China as a key market for its growth strategy, positioning itself to capitalize on the country’s evolving automotive landscape. With the establishment of the EV factory in Shanghai, Lexus is poised to make significant inroads in the electric vehicle market and solidify its position as a leading player in the industry.
Overall, the construction of the EV factory in Shanghai marks a significant milestone for Lexus and Toyota, underscoring their commitment to innovation, sustainability, and growth in the dynamic Chinese automotive market.
