Lexus officially broke ground on its new energy vehicle manufacturing facility in Shanghai’s Jinshan District today, marking the second wholly foreign-owned automobile enterprise in Shanghai following Tesla.

The Lexus new energy project, located in the Shanghai Bay High-tech Zone in Jinshan District, is scheduled for completion in August 2026, with production expected to commence in 2027. The first vehicle is planned to roll off the assembly line in 2027, with an annual production capacity of 100,000 cars.

Lexus (Shanghai) New Energy Co., Ltd. has a registered capital of 107.1 billion Japanese yen (740 million USD) and covers a total area of approximately 1.13 million square meters, larger than Tesla’s Shanghai factory, which occupies 860,000 square meters.

From the signing of the strategic cooperation agreement between the Shanghai Municipal Government and Toyota Motor Corporation on April 22 to the official start of construction on June 27, the project has moved from agreement to groundbreaking in just over two months, demonstrating what local officials call “Lexus speed.”

The Lexus project timeline bears similarities to Tesla’s rapid development in Shanghai. Tesla broke ground on its Shanghai Gigafactory on January 7, 2019, and delivered its first China-made Model 3 vehicles less than a year later, on December 30, 2019.

Through this investment, Toyota aims to accelerate its electric and intelligent transformation, developing electric vehicle brands better suited for both the Chinese domestic and international markets.

Editor’s comment

The Lexus Shanghai factory marks China’s second wholly foreign-owned automotive manufacturing facility, following Tesla. It breaks from the previous requirement that foreign automakers must partner with domestic firms to produce vehicles in China. Local authorities have provided exceptional support for the Lexus project, mirroring their treatment of Tesla.

While the Lexus facility’s area exceeds Tesla’s Shanghai Gigafactory by approximately 30%, the reported construction timeline may be conservative. Given China’s track record of accelerating crucial projects, the Lexus Shanghai plant could potentially begin operations well before the announced 2027 target. Let’s see if “Lexus speed” can match or surpass the remarkable “Tesla speed” in facility construction and deployment.

Source: The Paper