"Toyota secures agreement for the development of a fully owned Lexus electric vehicle manufacturing plant in Shanghai"
Toyota Announces New Lexus EV Factory in Shanghai
Toyota, the parent company of luxury brand Lexus, has revealed plans to establish a new electric vehicle (EV) factory in Shanghai, China. This factory, set to begin production by 2027, is a significant step in Toyota's global EV expansion strategy and a key component in the company's aim to produce 1 million EVs annually by 2030 [1][2][3][4].
The Shanghai facility will be Toyota's second wholly owned plant in China and is intended to produce Lexus-branded EVs locally. This strategic move underscores Toyota's commitment to the Chinese EV market and its efforts to optimize costs and supply chains by leveraging local manufacturing [1][2][3][4].
The agreement between Toyota and the Shanghai Municipal Government marks a milestone, as it will make the Lexus factory the second wholly owned manufacturing facility in China by a foreign-owned entity, following Tesla's Shanghai Gigafactory [1][2][3].
The new factory, located in the Jinshan District of Shanghai, will incorporate sales, manufacturing, research, and development in a central hub. The production at the Lexus facility could contribute to Toyota's efforts to meet its sales target and global EV lineup goals [1][2][3].
Toyota has committed to investing $2.02 billion USD in the project, with the goal of exceeding 95% domestic component usage in its vehicles. The advanced battery technology produced may be shared with other Toyota brands [1][2][3].
The factory's focus is on producing Lexus vehicles and advanced battery technology. Toyota aims to have a global EV lineup of up to 15 models across its brands by 2030 [1][2][3].
It remains unclear whether Toyota will export vehicles from the facility to other markets or if it will focus solely on the Chinese market. However, the high domestic component usage is expected to reduce the price of vehicles in the Chinese market by 15-20% compared to imported vehicles [1][2][3].
This strategic move aligns with Toyota's broader goal of producing 1 million EVs annually by 2030, as part of a global push to ramp up EV output over the coming decade. The Shanghai plant supports this target by expanding Toyota’s EV production capacity in one of the world's largest EV markets [2][3].
Toyota continues to lead in hybrid technology, which currently funds its EV research and development. At the same time, it invests heavily in new battery technologies (like solid-state batteries) expected to launch around 2027–2028, which will improve EV range, cost, and charging times—boosting the appeal and feasibility of high-volume EV production [2][3].
In conclusion, the Shanghai Lexus EV factory is an integral part of Toyota's plan to scale up EV production sustainably and competitively worldwide, contributing directly to the 1 million annual EV production target by 2030 through regional manufacturing strength and advanced technology deployment [1][2][3][4].
- Toyota's investment in the new Lexus EV factory in Shanghai could lead to advancements in battery technology, potentially benefiting other sectors that rely on energy-efficient solutions, such as finance and technology.
- The auto-racing industry might observe a shift towards electric vehicles as major players like Toyota commit to producing more EVs, with the Lexus EV factory in Shanghai being a significant step in this direction.
- The cut in vehicle prices in the Chinese market due to local manufacturing at the Shanghai Lexus EV factory could indirectly impact the finance sector, making electric vehicles more affordable for consumers, encouraging widespread adoption of energy-efficient vehicles across industries.
