95% of the new Lexus models will be manufactured in China

On April 22, Toyota Motor and the municipal government of Shanghai signed a strategic cooperation agreement. This agreement will allow the Japanese giant to develop new vehicles in Shanghai, the economic center of China. A key element of the deal is a fully-owned Lexus electric vehicle manufacturing plant that will be built in Shanghai's Jinshan district.

This will mark the second time a foreign automaker establishes a wholly-owned manufacturing facility in China, following Tesla’s Gigafactory in Shanghai, and it will be the first such venture for a Japanese car manufacturer.

Toyota plans to invest more than $2 billion in the construction of the plant. The facility will integrate research and development, manufacturing, and sales functions, focusing on the production of Lexus electric vehicles and advanced battery technologies.

According to reports, the use of Chinese-made components in Lexus vehicles will exceed 95%, which will significantly reduce production costs and potentially lower the prices by 15–20% compared to imported models.

The decision comes amid intensifying competition in China's electric vehicle market, where Toyota’s electric models currently account for less than 1% of total sales.