Toyota Motor is set to build a next-generation electric vehicle in China before any other market, marking a break from its long-standing approach of first developing and producing advanced models in Japan, according to a Nikkei Asia report.
The vehicle, which will be marketed under the Lexus brand, is set to be produced at Toyota’s new factory in Shanghai.
The production is due to begin in autumn next year.
The report said initial output will be about 1,000 vehicles a month in the first year, before increasing to tens of thousands of units a year in 2028.
The new model is expected to feature “leading-edge” technology, including gigacasting, which allows multiple aluminium body components to be moulded into a single large section.
This can reduce the weight of those areas by up to 20%, with estimates suggesting it could lift driving range by several per cent.
The production method is also intended to improve body rigidity and streamline the assembly process, helping to shorten manufacturing time.
China led the global battery electric vehicle (BEV) market last year with 8.57 million vehicles sold, capturing a 60% market share according to research firm GlobalData, the parent company of Just Auto. This volume was approximately three times higher than Europe's sales and more than 100 times greater than Japan's. China's BEV sales are projected to climb to 11.41 million vehicles by 2030.
The shift comes as Toyota adjusts its product plans by market. This spring, the company halted development of a sleek next-generation electric coupé in Japan, while in China demand is expected to be stronger for electric SUVs.
Competition in the Chinese market has also stepped up, with new launches including a large SUV introduced in June by BYD.
Toyota’s electric vehicle range in China already includes a budget SUV and a saloon fitted with displays from Huawei Technologies.
Recently, Nikkei Asia also reported that Toyota Motor plans to produce 10.5 million vehicles worldwide in 2027, including Lexus, as hybrid demand rises and total output moves above ten million units.
Output in Japan is expected to total at least 3.5 million vehicles, above the three million-unit benchmark Toyota maintains to preserve manufacturing capabilities and employment at its domestic operations.
Toyota reported net income of Y1.47tn ($9.32bn) for the first quarter of its 2027 financial year, up 75.6%, and raised its FY2027 guidance.
Consolidated sales revenue for the three months to 30 June 2026 was Y13.52tn, up 10.4% YoY, while operating income fell 8.8% to Y1.06tn.
