Toyota Motor is planning to establish a new electric vehicle (EV) manufacturing plant in China, focusing on its luxury Lexus brand, according to sources familiar with the situation.

Negotiations are reportedly underway to acquire land in Shanghai, with operations possibly starting in 2027.

This aligns with Toyota’s target to convert all Lexus models to EV by 2035.

The move comes as Japanese automakers face challenges in China’s competitive EV market, which is dominated by local manufacturers using aggressive pricing strategies.

Toyota’s sales in China dropped 9.3% from January to October this year, reaching about 1.41 million units compared to the same period in 2023.

Recent Toyota developments