Lexus is charging into a new era of electrification with the groundbreaking of its US$2 billion New Energy Vehicle Project in Shanghai, China, set to dramatically reshape its footprint in the world’s largest EV market.
The Toyota Lexus New Energy Vehicle Project officially began construction in Shanghai’s Jinshan District in June 2025, with a total investment of approximately US$2 billion. It is planned to produce 500,000 new energy vehicles annually. It is expected to be completed in August 2026 and put into production in 2027. The project aims to source more than 95% of its auto parts locally. At the same time, the Lexus Shanghai plant is expected to mass-produce solid-state batteries with an energy density of more than 400 Wh/kg by 2027, which will promote Lexus’ electric vehicle technology innovation worldwide.
Lexus sold approximately 180,000 vehicles in China in 2024, a slight increase of 0.3% year-on-year, but its primary offering still relies on ICE vehicles. Faced with a competitive environment where the penetration rate of new energy vehicles in China exceeds 50%, its pure electric model, the RZ, sells fewer than 20,000 vehicles a year and is in urgent need of cost reduction through localised production.
TOYOTA ACCELERATES LOCALISATION
Toyota is also accelerating its localisation in the Chinese market. GAC Toyota has transferred its development leadership to the Chinese R&D team and has cooperated with technology companies such as Huawei, Xiaomi, and Momenta to jointly develop the next generation of models for the Chinese market. In terms of intelligent driving assistance, the Toyota bZ5 pure electric coupé SUV is equipped with the Toyota Pilot, featuring an integrated Momenta assisted driving system.
Toyota has also accelerated its cooperation with China’s Robotaxi company Pony.ai. On August 4, 2023, Pony.ai held a signing ceremony with Toyota Motor (China) and GAC Toyota. The three parties announced the joint establishment of a joint venture to support the mass production and large-scale deployment of Robotaxi pre-installation. According to the plan, by the end of 2025, Pony.ai’s Robotaxi deployment scale will reach 500 to 600 vehicles. It is expected that by the first half of 2026, this number will exceed 1,000 vehicles.
Report by STAFF REPORTER
