- Lexus’ EV plant in Shanghai is expected to be completed in August 2026 and begin production in 2027, with an annual production capacity of 100,000 cars.
- Lexus will become the second foreign automotive brand after Tesla to establish a wholly-owned car factory in China.
Lexus has begun construction on its factory in Shanghai, as the premium brand of Japanese automotive giant Toyota aims to carve out a share of China’s highly competitive electric vehicle (EV) market.
The EV factory project, located in Jinshan district in southwest Shanghai, officially broke ground today, according to an announcement released by the district government.
The project is expected to be completed in August 2026 and begin production in 2027, with an annual production capacity of up to 100,000 vehicles, according to a report by local media outlet The Paper today.
Toyota aims to leverage the project to accelerate its transition toward electrification and smart cars, launching EVs tailored for both the Chinese domestic and international markets, the report said.
Toyota announced on February 5 that it would build a wholly-owned EV factory in Shanghai to produce Lexus models.
The first Lexus-branded battery electric vehicle (BEV) model was scheduled to begin production in 2027, according to the February statement.
The factory’s initial production capacity is about 100,000 units per year, with an estimated 1,000 new jobs created during the initial production phase.
This means Lexus will become the second foreign automaker after Tesla (NASDAQ: TSLA) to establish a wholly-owned automotive factory in China.
China relaxed restrictions in the pure electric vehicle sector in 2018, allowing foreign companies to operate wholly-owned entities. Starting in 2022, the country further lifted foreign equity ratio restrictions in the passenger vehicle manufacturing sector, permitting foreign automakers to establish wholly-owned factories.
In early April, Lexus acquired an industrial land plot spanning about 1.13 million square meters in Jinshan district for RMB 1.353 billion ($189 million), according to an announcement from the Shanghai Public Resources Trading Center.
The land plot is approved for use in NEV manufacturing, lithium-ion battery manufacturing, and other battery manufacturing.
On April 22, Toyota signed a cooperation agreement with Shanghai authorities to pave the way for the project’s launch.
Toyota is the world’s largest automaker by sales volume, and China is its third-largest market, trailing only the US and Japan.
($1 = RMB 7.1706)
GAC Toyota will appoint local personnel with the deepest understanding of the Chinese market to lead R&D efforts, including new models and facelifts.
