Lexus Will Build Its Next Electric SUV in China, Not Japan

Toyota is handing Lexus its biggest experiment yet. The luxury brand's next electric SUV will be built in China, at a brand-new plant in Jinshan, Shanghai, with sales starting in 2027. It's the first Lexus vehicle manufactured in China in more than two decades.

The Shanghai factory is the first Lexus plant Toyota has built from scratch overseas, and the company broke ground on it in June 2025. Construction was expected to wrap up this past August, with the first vehicle rolling off the line in fall 2027. Toyota has said the site will unlock 'Lexus speed' as it tries to keep up with homegrown rivals like BYD.

The debut model is an electric SUV, and it will lean on advanced production tricks including gigacasting, which cuts costs and speeds up output. The plant is a cornerstone of Toyota's comeback plan in China, where it has been losing ground fast.

The numbers are brutal. Toyota's sales in China tumbled nearly 20% last month, its eighth straight month of year-over-year declines. The company blamed a weak market, rising gasoline prices and soft demand for gas and hybrid vehicles. Across the first nine months of 2026, Toyota sold just over 1.05 million vehicles in China, down 18.9% from the same stretch a year earlier.

Output will start small — roughly 1,000 units a month in 2027 — before Toyota scales to 'tens of thousands' in 2028. The Shanghai facility is wholly owned by Toyota, giving it a way to build in China through its joint ventures.

Lexus is framing the push as a 'with China, for China' strategy, saying it will keep using China as a source of innovation and deepen localization to bring classic models tuned to local tastes. China is Toyota's third-biggest market after the US and Japan, and the automaker is now leaning harder on local partners and suppliers. The timing matters: Toyota usually takes four to five years to develop a new vehicle, while Chinese automakers are doing it in as little as two. Details on the SUV's battery, range and price are still under wraps.