Lexus to Launch New Electric SUV Built in China in 2027
The new vehicle will be produced at a wholly owned Toyota plant in Shanghai using gigacasting to reduce costs and speed up output.
Toyota’s luxury brand Lexus is planning to launch a new electric SUV in 2027, marking its first vehicle developed and produced in China in over two decades.
What Happened
Lexus confirmed the new electric SUV will be manufactured at its new plant in Jinshan, Shanghai. This facility, which broke ground in June 2025, is the first Lexus factory built from scratch overseas and is wholly owned by Toyota. The company stated the plant aims to combine global manufacturing capabilities with local innovation. Production capacity is expected to reach approximately 1,000 units per month in 2027, scaling up to tens of thousands in 2028. The vehicle will utilize advanced manufacturing methods, including gigacasting, to lower costs and accelerate production. Specific details regarding battery capacity, range, and pricing have not yet been announced.
Why It Matters
This move represents a significant departure from Toyota’s traditional development cycle, which typically takes four to five years, compared to the two-year timelines common among Chinese automakers. The strategy is a direct response to declining performance in the Chinese market, where Toyota’s sales fell nearly 20% last month and dropped 18.9% in the first nine months of 2026. By localizing production and leveraging Chinese supply chains for batteries and components, Toyota is attempting to regain competitiveness against domestic brands like BYD. This aligns with Lexus’ stated "with China, for China" strategy, which seeks to use the region as a source of innovation while adapting to local market demands.
The Bottom Line
Lexus’ new Shanghai-based electric SUV, scheduled for release in 2027, signals Toyota’s shift toward faster, localized EV development in China to combat significant sales declines and competitive pressure from domestic manufacturers.
