Toyota to Produce Next-Generation Lexus EVs in China First

【Financial News, Tokyo = Reporter Seo Hye-jin】Toyota Motor Corporation will produce its next-generation Lexus electric vehicle (EV) in China first. The move marks a break from its long-standing practice of launching advanced vehicles in Japan before expanding overseas, as the company steps up efforts to target China, which accounts for 60% of global EV sales.
According to Nikkei Asia on the 28th, Toyota will begin producing the next-generation Lexus electric sport utility vehicle (SUV) at a new plant in Shanghai next fall. The company plans to make about 1,000 units a month in the first year and expand output to tens of thousands of units a year by 2028.
The new model will use Giga Casting, a technology that integrates multiple aluminum body parts into a single large component. The process can reduce the weight of that body section by up to 20%. As a result, driving range is expected to increase by several percentage points. It can also improve body rigidity while simplifying assembly and speeding up production.
It is unusual for Toyota to first produce an advanced new vehicle in China. Until now, the company has developed and manufactured such vehicles in Japan first, then rolled them out globally based on sales in Japan and the United States.
According to market research firm GlobalData in the U.K., China sold 8.57 million EVs last year, accounting for 60% of global sales. That is nearly three times the volume in Europe and more than 100 times Japan's level. EV sales in China are projected to rise to 11.41 million units by 2030.
EV sales remain sluggish in Japan, Europe and the United States, but the global market is expected to grow over the medium to long term. In particular, China is seen as a key market that will shape the future balance of power in the global auto industry.
This spring, Toyota halted development in Japan of a next-generation Lexus electric coupe with a streamlined body. Instead, it decided to produce a new model in China, where demand for electric SUVs is expected to be strong. Competition is intensifying locally, with Chinese EV maker BYD Company Limited (BYD) launching a large SUV in June.
Toyota is pursuing a 'multi-pathway' strategy that develops and produces vehicles locally to match regional demand. In Japan and the United States, it is focusing on hybrid and gasoline-powered vehicles, while in China it is shifting toward EVs.
The company currently sells an entry-level electric SUV in China, as well as an electric sedan equipped with a Huawei display. It plans to expand sales by adding premium models such as the Lexus EV.
Global automakers are also changing their development systems with the Chinese market in mind. New vehicles typically take four to five years to develop, but Chinese EV makers can launch new models in as little as two years. Nissan Motor Co., Ltd. plans to shorten its development cycle to 26 months, while Volkswagen intends to work with Chinese automakers to introduce up to 50 models in the local market by 2030.

[email protected] Seo Hye-jin Reporter