Toyota succumbs and now plans to build a new EV in China first — SkimNews
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- Toyota is planning to build a new electric Lexus SUV in China rather than Japan — its home market where it has traditionally developed and produced vehicles — with production set to begin at a new Shanghai plant next fall, according to Nikkei.
- The new Lexus EV will use advanced manufacturing methods including gigacasting, with initial output of about 1,000 vehicles per month ramping to "tens of thousands" in 2028 at the Shanghai facility Toyota broke ground on in June 2025.
- Toyota scrapped plans earlier this year to develop a flagship next-gen Lexus EV in Japan using similar production methods, making this China-first pivot a direct reversal of its earlier strategy.
- China accounts for about 60% of global EV sales in 2025, or roughly 100 times Japan's EV market according to GlobalData, making it the market legacy automakers must adapt to or fall behind in.
- Toyota sold just under 810,000 vehicles in China through July 2025, an 18% decline from the same period in 2025, as it faces a wave of low-cost domestic competitors including BYD.
- BYD CEO Wang Chuanfu believes his company will overtake Toyota in global sales within the next five years, per the source, underscoring the competitive pressure driving Toyota's shift.
- Toyota already builds EVs in China via joint ventures with GAC and FAW (such as the bZ3X SUV), but the new Lexus SUV marks the first time it is developing a new EV in China first rather than adapting a Japan-designed model.
Why it matters: Toyota's reversal — developing a new EV in China first after killing its Japan-only plan — concedes that the center of EV innovation has shifted to China, where the company is already losing ground with an 18% sales decline through July. The 1,000-units-per-month Shanghai output is symbolic volume, but the strategic signal matters more: Toyota is now sourcing its future EV lineup from the same market where BYD's CEO expects to dethrone it within five years.
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