Japanese automaker Toyota Motor Corp. has signed a landmark agreement to invest $2 billion in establishing a wholly owned electric vehicle (EV) plant in Shanghai. This strategic move aims to strengthen Toyota’s presence in the Chinese mainland, the world’s largest automotive market.
The new plant, located in Shanghai’s Jinshan District, will focus on the research, development, production, and sales of Lexus EVs and EV batteries. Construction is set to begin in June, with production expected to start in 2027. The project is anticipated to create approximately 1,000 new jobs during its initial phase.
“This project will introduce groundbreaking technologies to create a leading carbon neutrality model that will have significant influence both in China and globally,” said Tatsuro Ueda, CEO of China Region and chairman of Toyota Motor (China) Investment Co., Ltd. “We look forward to collaborating with more local suppliers to showcase the competitive advantages of China’s NEV industry chain to the world.”
The investment underscores the attractiveness and openness of China’s vast market. As the country continues to promote green development and sustainable transformation, foreign automakers like Toyota are deepening their presence to tap into the booming new energy vehicle (NEV) sector.
Toyota’s move follows similar investments by other global automakers. Tesla’s Shanghai Gigafactory and new Megafactory have significantly expanded the U.S. company’s footprint in China. German carmaker BMW has partnered with Chinese tech giant Huawei to develop an in-car digital ecosystem tailored for the Chinese market, while Volkswagen Group is introducing new NEV models specifically designed for China.
China’s NEV industry has experienced exponential growth, with sales soaring 47.1% year-on-year to 3.08 million units in the first quarter, accounting for 41.2% of total vehicle sales, according to the China Association of Automobile Manufacturers.
The new Toyota plant is expected to further enhance the EV industry chain in the Jinshan District and benefit suppliers across the Yangtze River Delta region. Toyota and Shanghai will also collaborate on intelligent driving, hydrogen energy, battery recycling, and supply chain logistics.
Toyota’s significant investment reflects multinational companies’ confidence in the Chinese market despite global economic uncertainties. “The Chinese market remains highly attractive to foreign companies,” noted Bai Ming, a researcher at the Chinese Academy of International Trade and Economic Cooperation.
