Toyota Motor, the world’s leading automaker, announced on Wednesday the establishment of a wholly owned subsidiary in Shanghai dedicated to the development and production of electric vehicles (EVs) and batteries for its luxury brand, Lexus. Production is slated to commence in 2027.
The new company will develop a next-generation Lexus EV model, with an initial annual production capacity projected at approximately 100,000 units. This venture will create around 1,000 new jobs during its initial phase. The move signifies a significant investment in the rapidly expanding Chinese EV market and underscores Toyota’s commitment to electrifying its luxury vehicle lineup.
Beyond vehicle production, Toyota is collaborating with the Shanghai municipal government on carbon neutrality initiatives. This partnership aims to support China’s national objective of achieving carbon neutrality by 2060. The joint efforts will likely explore various strategies to reduce carbon emissions throughout the automotive lifecycle, from manufacturing and supply chain operations to vehicle usage and end-of-life management.
The strategic decision to locate this new EV company in Shanghai aligns with the city’s position as a major hub for automotive innovation and manufacturing in China. Shanghai offers access to a skilled workforce, a robust supply chain, and a supportive regulatory environment for new energy vehicle development. By establishing a dedicated entity for Lexus EVs in Shanghai, Toyota aims to leverage these advantages to accelerate its electrification strategy in the world’s largest auto market. This initiative also positions Lexus to better compete with other luxury EV brands already established in China.
This move by Toyota is a significant development in the global automotive landscape, reflecting the increasing importance of the Chinese market and the accelerating transition towards electric mobility. The establishment of the Shanghai-based Lexus EV company positions Toyota to capitalize on these trends and further solidify its position as a leader in the automotive industry.
