Photo Credit: ToyotaFor Toyota, building a new electric SUV in China and not Japan represents a notable departure from its playbook.As Electrek detailed, the plan is another indicator of China's growing role in determining how the EV industry evolves.Here's what to knowNikkei first reported that Toyota is expected to make the electric vehicle at its Lexus plant in Shanghai, where construction began in June 2025. The first vehicles are targeted for 2027, with monthly output starting at around 1,000 before climbing to "tens of thousands" in 2028.AdvertisementAdvertisementProducing that vehicle there would break Toyota's long-running habit of developing major new models in its home market before anywhere else, as Electrek pointed out. The move also comes after the company dropped an initiative in 2026 for a flagship next-generation Lexus EV in Japan that was tied to similar manufacturing techniques.China's role in electric vehicles helps explain the change. In 2025, GlobalData reported the country represented about 60% of worldwide EV sales, which is around 100 times Japan's total.Electrek said Toyota already produces some EVs in China through joint ventures with GAC and FAW, but choosing China as the first production site for a Lexus EV shows a strong response to pressure from domestic rivals such as BYD.More backgroundMore and more, China is the market forcing automakers to speed up development, reduce costs, and adopt newer battery and manufacturing technology. AdvertisementAdvertisement"Almost like China has become the only adult in the room who has invested for the long term and is now starting to see the fruits of that investment," an Electrek commenter wrote. Toyota has maintained its "multi-pathway" strategy in markets such as the United States and Japan, prioritizing hybrids and gas-powered vehicles alongside EVs, but competition in China is pushing the company toward a different strategy, per Electrek.That pressure is already showing up in Toyota's numbers, the outlet noted. Through July, Toyota sold almost 810,000 vehicles in China, an 18% decline from the same stretch in 2025. China ranks behind only the United States and Japan for Toyota, meaning a loss of ground there could have global consequences.What can be done?By anchoring this Lexus launch in Shanghai, Toyota is treating China as more than a sales destination. AdvertisementAdvertisementIt is also using the market as a testing ground for the next phase of EV manufacturing. As Electrek reported, the company said when breaking ground at the plant the focus was on achieving "Lexus speed."For drivers thinking about buying an electric vehicle, this is another sign that EV development is accelerating worldwide.Consumers can benefit from low total ownership costs. In many cases, cheaper fueling expenses and reduced maintenance in comparison to those of gas vehicles can offset high upfront costs, especially for people with daily commutes.Where can I learn more?Toyota's plan to put a Lexus EV into production in China first reflects bigger changes sweeping the country's electric vehicle market. The articles below show how buyer demand, pricing pressure, and tight rules in China are pushing global automakers to move faster than they have in Japan and other markets.AdvertisementAdvertisement• China's electric car revolution is cutting oil demand and reshaping global auto strategy.• In China, tougher EV battery rules could raise costs while pushing safety higher.• BYD's $11K Seagull EV shows how aggressively Chinese rivals are squeezing prices.• In Japan, unlimited charging for less than $20 a month highlights changing EV economics.That backdrop helps explain why Toyota would reconsider where to launch a major Lexus EV. China now plays an outsize role in the sales pace, production economics, safety standards, and competitive pressure shaping the next generation of cars.Get TCD's free newsletters for easy tips, smart advice, and a chance to earn $5,000 toward home upgrades. To see more stories like this one, change your Google preferences here.
