According to Reuters, Toyota Motor Corporation has announced plans to establish a wholly owned subsidiary in Shanghai, China, for the development and production of electric vehicles (EVs) and batteries under its Lexus brand. The new manufacturing facility, scheduled to begin production in 2027, will have an initial annual capacity of 100,000 units and create approximately 1,000 new jobs in its start-up phase.
Toyota will become the second foreign automaker, after Tesla, to operate a wholly owned EV production facility in China. The company has reached a carbon-neutral partnership agreement with the Shanghai municipal government and will establish its new subsidiary in Jinshan District, leveraging the region’s mature industrial supply chain, logistics network, and skilled workforce. Toyota’s Shanghai plant is expected to first produce the Lexus UX hybrid alongside a new BEV model. This initiative is part of Toyota’s broader electrification strategy, which aims to accelerate the development of premium EVs and strengthen its foothold in China’s rapidly evolving EV sector.
Toyota has traditionally operated in China through joint ventures with FAW Group and GAC Group since entering the market in 1964. Toyota’s investment follows China’s policy reforms in 2018, which allowed foreign automakers to establish wholly owned EV operations. The 2022 policy updates further removed foreign ownership restrictions in passenger car manufacturing, paving the way for companies like Tesla and Toyota to fully control their production facilities in China. Tesla’s Shanghai Gigafactory, which began operations in 2019. The total production of the Shanghai Gigafactory has already exceeded 3 million. Toyota’s decision to establish its own wholly owned EV plant aligns with this trend, as it seeks to regain market share in China.
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