Toyota has been building cars in China for quite some time now through FAW Toyota and GAC Toyota. The two joint ventures made a tidy 1.7 million cars last year. By 2027, though, Toyota will be making Lexus electric vehicles on its own at a plant to be opened in Shanghai.

First reported by Nikkei Asia, the soon-to-open factory would be the first to be wholly owned and operated by Toyota in the country. This would also make it the first Japanese manufacturer to have such an independent operation in China since Nissan, Honda, and Mazda all operate under their respective joint ventures. The Shanghai plant will focus on building Lexus cars for the burgeoning Chinese market.

Lexus sold 180,000 cars in China in 2023, all imported from Japan. With the Chinese car market currently at around 27 million units per year (and growing), and intense competition from Chinese EV brands (such as BYD, Zeekr, Huawei, MG, and XPeng), it remains to be seen whether the Lexus brand will succeed where other luxury brands such as Mercedes-Benz and Porsche have been struggling. Building its cars within China could, in theory, make its pricing more competitive without diluting the brand image.

According to then-CEO Akio Toyota back in 2021, Lexus would have an all-electric lineup by 2035. The brand wants to sell one million EVs by 2030, with its lineup for China, North America and Europe all electric in the same year.

The LF-ZC (Lexus Future Zero-emission Catalyst) concept was introduced at the 2023 Japan Mobility Show, and is due for market launch in 2026. While no official announcement yet has been made, this—along with the RZ450e—could be among the models to be produced at the Shanghai factory.