Toyota is breaking its own rules and will build a new electric vehicle in China before Japan, using advanced tech.
Why is Toyota building new EVs in China first?
If you can’t beat them, join them. Right? Toyota is reportedly planning to build a new electric vehicle in China rather than in Japan, its home market where it has traditionally developed and produced vehicles.
The new EV will be an SUV under the Lexus brand. According to Nikkei, production will begin at Lexus’ new manufacturing plant in Shanghai next fall.
Toyota broke ground on the facility in June 2025, claiming the new plant will enable what it calls “Lexus speed” as it aims to keep pace with domestic automakers like BYD. Construction was expected to wrap up this month, with the first vehicles set to roll off the line in 2027.
Production will start at about 1,000 vehicles per month next year as Toyota ramps up output to “tens of thousands” in 2028.
The new Lexus EV will be made using advanced manufacturing methods, including gigacasting, to cut costs and speed up production.
Toyota joins a growing list of legacy OEMs already developing and producing vehicles in China first or planning to do so very soon. China is by far the largest EV market, accounting for about 60% of global sales in 2025, or roughly 100 times that of Japan according to GlobalData.
Lexus LF-ZC EV concept car (Source: Toyota)
The report comes after Toyota scrapped plans earlier this year to develop a flagship next-gen Lexus EV in Japan using similar production methods.
In overseas markets like the US and Japan, Toyota is sticking to its “multi-pathway” strategy, which focuses mainly on hybrid and gasoline vehicles tailored to local needs.
Toyota bZ3X electric SUV (Source: GAC-Toyota)
In China, however, it’s a whole different game. Legacy automakers are being forced to adapt, or risk falling behind, and Toyota is no exception. China is Toyota’s third-largest market, following the US and Japan.
Toyota, like all automakers, is facing a wave of low-cost domestic vehicles in China. Through July, Toyota sold just under 810,000 vehicles in China, 18% fewer than in the same period in 2025.
Electrek’s Take
Toyota already builds several electric vehicles in China, like the bZ3X SUV. But it produces these through its joint ventures with China’s GAC and FAW.
Developing the new Lexus electric SUV in China first rather than Japan is significant given Toyota’s history of sticking to tradition.
It traditionally takes about four to five years to fully develop a new vehicle, while in China automakers are now building them in as little as two years.
Legacy automakers like Toyota are increasingly tapping into China for advanced tech, batteries, production methods, and other EV components as they look to keep pace with the industry’s shift to electric.
The shift caught most legacy automakers flat-footed in China, and now it’s happening in overseas markets.
While Toyota is turning to China, BYD’s CEO Wang Chuanfu believes the company will overtake it in global sales within the next five years.
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