Toyota has revealed plans to establish a wholly owned production company in Shanghai, which will be the first independent Electric Vehicle (EV) manufacturing effort by the Japanese automaker in China. Until now, Japanese carmakers have only produced through joint ventures with local companies such as GAC Group and FAW Group, given the strict restrictions on foreign investment in China.
While leveraging changes in the policy introduced in 2018, allowing overseas car manufacturers to have wholly-owned operations, it will only become the third automaker in history to own manufacturing facilities fully hereafter Volkswagen and Tesla.
Production at the new plant begins in 2027, with an initial annual capacity set at 100,000 units and the generation of 1,000 jobs in the start-up phase. In addition to vehicle production, Toyota will cooperate with the Shanghai Municipal Government in carbon neutrality plans in line with China's net-zero emission by 2060. This is part of a larger play for Toyota to consolidate its position further in the world's largest automobile market. Local Chinese carmakers such as BYD, Geely, and Chery will, however, present a challenge for Toyota, especially in the local EV market. It intends to expand the business in China, targeting an evolving market as well as expanding demands for high-end electric cars, this time focusing more on luxury electric cars under the brand Lexus.