Lexus's first manufacturing plant in China is nearing completion in Shanghai's Jinshan district, according to a field investigation by the Chinese outlet 第一电动 (D1EV). The factory, which will produce battery-electric vehicles (BEVs), is seen as a critical move for the brand to catch up in China's fast-evolving EV market.
The plant's six main buildings—die-casting, stamping, body welding, painting, final assembly, and battery assembly—have all been structurally completed, with rooftop solar panels largely installed, according to a video released by a Lexus sales service company in October and cited by D1EV. During a late-October visit, D1EV reporters observed large equipment already inside the final assembly hall, with workers installing and testing machinery, though the work was not yet finished.
Construction workers at the site said they were not involved in production, and Lexus employees declined to comment on hiring or progress, citing official channels. One Lexus staff member revealed that production-line workers had been recruited but had not yet started, a claim corroborated by job listings on major Chinese recruitment sites showing open positions in painting, assembly, die-casting, welding, and stamping. The plant's canteen, set up in March last year, is contracted for another two months, suggesting the construction phase will end soon.
Capacity and model plans
The Jinshan facility represents a total investment of about 14.6 billion yuan (roughly $2.06 billion) and covers 1.13 million square meters, with a planned annual capacity of 100,000 vehicles—a figure D1EV calls conservative, noting that even half the capacity of Tesla's Shanghai gigafactory could yield nearly 250,000 units after ramp-up. Given Lexus's global sales of around 850,000 to 900,000 vehicles annually, the plant is clearly intended to serve export markets as well as China.
Lexus has not confirmed which models will be built there, but market speculation points to the TZ series, a three-row electric SUV, or an electric version of the ES sedan, both of which target popular segments in China. However, Lexus's BEV sales have been weak: the RZ model has sold only single-digit units monthly in China, and in May Toyota halted development of the LF-ZC production model, citing changing market demand.
The new plant is also part of a broader supply-chain shift. According to a Nikkei report cited by D1EV, Toyota plans to use over 95% local Chinese parts for the new Lexus BEV SUV, set to start production in autumn 2027. Japanese suppliers have largely lost bids for core components like body, battery, and wiring, with orders going to Chinese firms—a sign of how deeply the brand is integrating into China's EV ecosystem.
Can Lexus sell enough EVs?
The challenge ahead is substantial. In fiscal 2025, Toyota and Lexus sold about 5.04 million electrified vehicles, but only 243,000 were pure EVs. Toyota forecasts that in fiscal 2026, hybrid sales will exceed 5 million, while BEV sales will stay under 1 million, leaving Lexus with a modest share. D1EV notes that Chinese competitors have already gone through one or two product cycles in the BEV space, and even the large six-seat SUV segment is shrinking.
The plant's employee benefits have also drawn attention: workers receive commuting and meal allowances, with dormitories not yet built—renting a one-bedroom apartment costs about 1,200 yuan ($169) per month. Business trip allowances are 160 yuan ($22.5) per day on weekdays and 240 yuan ($34) on weekends, with free hotel and breakfast, according to media reports cited by D1EV. Overtime is capped at 36 hours per month for blue-collar workers.
As the factory prepares to open, the question remains whether Lexus can translate its new Chinese production base into a genuine BEV revival, both at home and abroad.
