Toyota Motor Corporation, Japan’s leading automaker, has announced its plans to establish a wholly-owned subsidiary in China dedicated to producing battery electric vehicles (BEVs) under its luxury Lexus brand. The new plant, set to be located in Shanghai’s Jinshan district, is projected to commence commercial production of Lexus BEVs and related batteries by 2027, with an initial capacity of 100,000 vehicles per year and around 1,000 direct employees.
In 2021, Lexus witnessed impressive sales figures in China, surpassing 180,000 units and solidifying its position as the brand’s second largest market globally after the US. With this in mind, Toyota has confirmed its intention to develop a new Lexus BEV model tailored specifically for the Chinese market, further catering to the preferences and demands of local consumers.
Toyota will become the second global automaker to establish a wholly-owned vehicle production subsidiary in Shanghai, following in the footsteps of US-based Tesla. Currently, Toyota has partnerships with state-owned FAW Group and Guangzhou Automobile Group, resulting in a combined production of over 1.5 million Toyota-branded vehicles in China last year.
Moreover, Toyota also unveiled a comprehensive partnership agreement with the Shanghai municipal government, focusing on initiatives related to carbon neutrality. The collaboration aims to support the Chinese government’s target of achieving carbon neutrality by 2060 through advancements in hydrogen energy, automated driving technology, and battery recycling and reuse.
China stands as the world’s largest BEV market, with domestic sales estimated at approximately 6.7 million units and an additional 1 million units exported to global markets. Toyota’s decision to establish a Lexus BEV plant in China aligns with its strategic goal of enhancing the supply of products that meet the evolving needs of customers in the region.
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