Autoblog and Yahoo may earn commission from links in this article.If reports are to be believed, Toyota is making a massive pivot in its manufacturing history. Breaking its long-standing tradition, the automaker will build its next-generation electric vehicles in China before its home turf. Starting with a Lexus SUV in autumn 2027, the move signals a sharp recalibration of priorities. The new Shanghai operation will serve as the primary incubator for developing and building its most advanced battery-electric models.This shift comes as legacy foreign brands face intense pressure from local competitors like BYD. With the new energy vehicle penetration rate skyrocketing, Toyota aims to capture momentum in the world's most aggressive electric vehicle market before exporting these innovations globally. China accounted for around 60 percent of global battery-electric vehicle sales last year, dwarfing Japan's domestic volume entirely.Lexus LF-ZC Concept EVLexusBetting on ShanghaiThe ambitious project centers around a new ¥14.6 billion ($91 million) factory located in Shanghai's Jinshan district. As Toyota's first wholly owned EV manufacturing facility in China, it will exclusively focus on developing and producing advanced Lexus models. Early output is slated at roughly 1,000 units monthly, scaling to tens of thousands annually by 2028. While specifications remain unconfirmed, the luxury vehicle is widely expected to be a crossover.AdvertisementAdvertisementTo make this viable, the upcoming vehicle will rely on giga-casting. Pioneered by Tesla, this production method forms massive aluminum body sections as single, large castings. Toyota claims this technology will slash weight by up to 20 percent and significantly boost structural rigidity. Ultimately, this weight reduction could provide a notable improvement in overall driving range while reducing complex assembly processes.Beyond hardware, the brand is actively leveraging local digital ecosystems. Recent market movements show Japanese global players successfully integrating Chinese technology to slash R&D costs and improve connectivity. A prime example is the new bZ7 sedan, where the flagship electric vehicle generated thousands of orders instantly due to aggressive pricing and smart local software partnerships. Toyota now wants to replicate that urgency for Lexus.Getty ImagesWriting Is On The WallToyota's decision to prioritize Shanghai over Aichi is a jarring but necessary reality check. The simple truth is that the Chinese automotive market moves at a blistering pace, and clinging to legacy development cycles is a death sentence. By putting its most advanced Lexus tech in the hands of Chinese manufacturing, Toyota is finally acknowledging where the absolute center of the EV universe now lies.Despite the doom and gloom surrounding legacy automakers in Asia, the company isn't panicking globally. The Japanese automotive heavyweight continues to rely on its bulletproof reputation for reliability and massive hybrid sales everywhere else. However, mastering the Chinese EV gauntlet is the only way Toyota can ensure its future electric platforms remain competitive on the world stage.ToyotaThis story was originally published by Autoblog on Sep 2, 2026, where it first appeared in the News section. Add Autoblog as a Preferred Source by clicking here.