Toyota to Build Next Lexus EV in China Ahead of Japan Launch

Toyota Motor plans to manufacture its next-generation Lexus electric vehicle in China ahead of Japan, deploying gigacasting technology in Shanghai to cut production costs.

The decision breaks with the ¥36.9 trillion automaker’s established practice of debuting new Lexus platforms at domestic Japanese assembly plants before rolling them out overseas.

Gigacasting and Supply Chain Shifts

Toyota will base the new manufacturing operations in Shanghai to shorten production lead times and align output with local buyers. Adopting gigacasting techniques allows the factory to cast large single-piece structural components, reducing assembly steps and altering Toyota’s global cost structure for future battery-electric models.

Targeting China first concentrates advanced manufacturing where volume demand for premium electric cars is concentrated. The rollout forms part of Toyota’s plan to use internal battery investments and tighter plant efficiency to protect profit margins as its electrified vehicle ratio rises.

Price Pressures in Shanghai

Lexus contends with severe retail rivalry across China from Tesla, BMW and local electric brands that continue to push aggressive discounting across the luxury segment. Building inside China removes import overheads and shortens delivery cycles, helping the brand defend showroom pricing and aftersales service value.

The next operational milestone will be the integration of the gigacasting lines at the Shanghai facility as Toyota works to bring the platform into commercial production without straining operating cash flows.