Lexus, the luxury brand under Japanese automaker Toyota, has made a significant move in the Chinese market by acquiring a plot of land in Shanghai for the construction of its first wholly-owned electric vehicle (EV) plant in China. The land, located in Jinshan district in southwestern Shanghai, spans approximately 1.13 million square meters and was purchased for RMB 1.353 billion yuan ($185 million).
This strategic investment marks Lexus as the second foreign automaker to establish a wholly-owned auto plant in China, following in the footsteps of Tesla. The Shanghai Public Resources Trading Center confirmed the sale of the land on April 1, with a 50-year term of use granted by the Shanghai Jinshan District Planning and Natural Resources Bureau.
The industrial land is designated for the manufacturing of new energy vehicles (NEVs), lithium-ion batteries, and other battery-related activities. Toyota had previously announced its plans to build a wholly-owned EV plant in Shanghai specifically for producing Lexus models, with the first Lexus-branded battery electric vehicle (BEV) expected to roll off the production line in 2027.
The new facility is projected to have an annual capacity of around 100,000 units and is anticipated to create approximately 1,000 new job opportunities during the initial phases of production. This development underscores China’s growing appeal as a key market for global automakers, with the country easing restrictions in the pure electric vehicle sector since 2018 to allow foreign companies to operate as wholly-owned enterprises.
Following the success of Tesla’s Shanghai factory, which commenced operations in late 2019 as China’s first wholly foreign-owned auto manufacturing project, Toyota is positioning itself to leverage the immense potential of the Chinese market. As the world’s largest automaker by sales volume, Toyota views China as its third-largest market after the US and Japan, highlighting the significance of this strategic expansion.
With China’s automotive landscape evolving rapidly and foreign automakers increasingly establishing a presence in the country, Lexus’ foray into the Chinese EV market signals a new chapter in the brand’s global growth strategy. As the automotive industry continues to embrace electrification and sustainable mobility solutions, Lexus’ investment in a state-of-the-art manufacturing facility in Shanghai underscores its commitment to innovation and meeting the evolving needs of Chinese consumers.
Overall, Lexus’ acquisition of land in Shanghai for its first wholly-owned EV plant in China represents a pivotal milestone in the brand’s journey towards electrification and underscores the growing importance of the Chinese market in the global automotive landscape.
