Lexus plans to sell a China-built electric SUV in 2027, its first vehicle made in China in over two decades. The model will come out of a new Lexus factory in Jinshan, in southwestern Shanghai, that Toyota owns outright and that is the first Lexus plant built from scratch overseas. Battery size, driving range and pricing have not been announced.
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Volumes start modest. Production is slated at about 1,000 units a month in 2027, climbing to tens of thousands of units in 2028, with the first vehicle due off the line in fall 2027. Toyota has framed the plant as the way to unlock what it calls Lexus speed while the brand tries to keep pace with domestic Chinese makers such as BYD, and the SUV will rely on gigacasting to cut costs and shorten build times.
Jinshan plant under full Toyota ownership
Electrek’s report on the plan, published November 2, 2026, describes the factory as wholly owned by Toyota, with vehicles built through the company’s joint ventures. The paper trail starts on April 22, 2025, when the Shanghai Municipal Government and Toyota signed an agreement for a fully owned plant covering research, manufacturing and sales of Lexus battery-electric vehicles plus Toyota batteries. The city’s account puts the project at 14.6 billion yuan, about $2 billion, on an initial parcel of roughly 112.8 hectares, with the first vehicle expected in 2027.
The same agreement reaches beyond the assembly line. It also covers cooperation with upstream and downstream suppliers, autonomous driving, hydrogen energy, battery recycling and supply chain logistics, and Shanghai notes that Jinshan already hosts 159 companies in the auto industry chain, 96 of them above designated size. The 2027 first-vehicle timeline on the city’s page is attributed to Shanghai Xinjinshan Industrial Investment Development Co., the local investment company tied to the site.
Groundbreaking came in June 2025, with construction then expected to finish in August 2026. Toyota had announced in February 2025 that it would set up a wholly owned Shanghai company to develop and produce Lexus battery-electric models and batteries. If the plant runs as planned, Lexus would become the second foreign automaker after Tesla to own a vehicle plant in China outright, a point CnEVPost makes in its own coverage of the project.
Gigacasting and the 1,000-a-month ramp
The SUV will use gigacasting, in which large aluminum body sections are formed in a single casting instead of being welded together from many stamped parts. CnEVPost, summarizing a Nikkei report, said the technique could trim some body-structure weight by up to 20%, add a few percentage points of range per charge, and improve rigidity and production speed. Toyota had not confirmed those production details in that coverage, so the weight figure stays a reported projection and not a company specification.
CnEVPost also ran the numbers. A pace of 1,000 vehicles a month works out to about 12,000 a year, roughly 12% of the plant’s planned annual capacity of 100,000 units. That ratio is the outlet’s own arithmetic rather than a Toyota figure, but it fits the cautious ramp both reports describe.
Development speed is the other open question. Electrek notes that Toyota typically spends four to five years developing a new vehicle, while Chinese automakers can finish one in as little as two. Lexus says its approach is to keep using China as a source of innovation and to deepen localization, which is how it intends to narrow that gap. CnEVPost adds that Toyota shelved a lower-slung EV coupe in Japan in spring 2026 and shifted its next-generation EV focus toward SUVs, the body style in stronger demand in China.
Electrek frames the move as an adaptation. Toyota generally pursues a multi-pathway strategy that spans every powertrain from battery-electric to combustion, but in China the company is bending that approach toward local EV engineering, and it joins other major automakers that are tapping Chinese suppliers and development teams for their next-generation electric models. The Shanghai plant gives Lexus a facility dedicated to that approach rather than a shared joint-venture line.
A shrinking Toyota business in China
The timing sits against a rough sales backdrop. Toyota’s China sales fell nearly 20% in October 2026, the eighth straight month of year-over-year declines, and the company said the market stayed weak in part because of rising gasoline prices. Across the first nine months of 2026 it sold just over 1.05 million vehicles in China, 18.9% fewer than a year earlier. In July alone, CnEVPost reported, sales dropped 24.3% to 114,747 vehicles. China remains Toyota’s third-largest market, after the United States and Japan.
Lexus describes its strategy as being “with China, for China.” Whether that yields a competitive car depends on details still unannounced: the battery, the range and the price. The start of production also rests on a Nikkei report placing it in the second half of 2027, which leaves the exact on-sale date for Lexus to confirm.
This article was produced with the assistance of AI and reviewed by Morning Overview editors prior to publication.
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