Why Is Lexus Building Its Own Factory in China?

Toyota spent years telling the world to slow down on electric cars. Now it's building its crown jewel, a pure electric Lexus, in Shanghai. And for the first time in its history in China, it's doing it 100% wholly owned, with no Chinese partner. Only one other foreign carmaker has ever been allowed to do that: Tesla. In this video, we break down the Lexus EV factory in Jinshan District, Shanghai: a roughly $2 billion investment, a 1.13 million square meter site, and production scheduled to begin in 2027. The whole thing went from announcement to broken ground in under five months, which is shockingly fast for the most cautious carmaker on Earth. Why would Toyota do this? The answer is China's EV supply chain. Around Shanghai sits the densest, fastest electric car ecosystem ever built: CATL and BYD batteries, motors, chips, software, and suppliers that can help take a car from sketch to showroom in about 18 months. Meanwhile, Lexus's resale value in China has collapsed, BYD outsold Toyota in EVs inside Japan itself, and Japanese brands' share of the Chinese market has fallen from over 40% to around 18%. We also look at what this means for Japan's keiretsu supplier network, why the direction of learning in the car industry has reversed, how Toyota is partnering with BYD, and why rising tariffs and trade tensions make this a surprisingly risky bet for the world's most careful company. The skeptic went electric. The homebody went abroad. The teacher became the student. Is Toyota being brilliant, or is this a surrender dressed up as strategy? Tell me where you land in the comments. If this opened your eyes to what's happening beneath the headlines, subscribe and turn on notifications so the next one finds you. SOURCES: Shanghai Municipal Government: Toyota breaks ground on EV, battery plant in Jinshan https://english.shanghai.gov.cn/en-Ex... Shanghai Municipal Government: Toyota's EV plant in Shanghai has big plans https://english.shanghai.gov.cn/en-La... China Daily: Toyota's EV plant in Shanghai has big plans https://global.chinadaily.com.cn/a/20... CnEVPost: Lexus secures land for wholly-owned EV plant in Shanghai https://cnevpost.com/2025/04/15/lexus... CnEVPost: Toyota to follow Tesla in building wholly-owned Shanghai plant https://cnevpost.com/2025/02/05/toyot... CnEVPost: Lexus breaks ground on EV plant in Shanghai https://cnevpost.com/2025/06/27/lexus... CarNewsChina: Toyota signs agreement with Shanghai, wholly-owned Lexus EV factory https://carnewschina.com/2025/04/22/t... CarNewsChina: BYD surpasses Toyota in Japan's 2024 EV sales https://carnewschina.com/2025/01/13/b... Electrek: BYD beat Toyota in EV sales on its home turf in 2024 https://electrek.co/2025/01/13/byd-be... Bloomberg: Japan's carmakers losing ground to BYD and Geely https://www.bloomberg.com/graphics/20... Bloomberg: Toyota clawing back China market share with new $15,000 EV https://www.bloomberg.com/news/articl... Richard Katz: China's BYD aiming to seize Toyota's crown https://richardkatz.substack.com/p/ch... News18A: Japanese automakers' China market share decline and Toyota-BYD cooperation https://english.news18a.com/news/engl... #Toyota #Lexus #China #ElectricVehicles #EV #BYD #Tesla #Shanghai #AutoIndustry #Japan #LexusEV #ElectricCars #CarIndustry #Business #Economy #Geopolitics #SupplyChain #CATL #TradeWar #Documentary