Toyota is making a significant change to the way it develops and manufactures electric vehicles, with its next-generation Lexus EV set to be built in China using a production technique pioneered by Tesla.
The unnamed electric SUV is expected to enter production at Toyota’s new Shanghai manufacturing facility in late 2027. The move represents a major shift for Toyota, which has traditionally developed and introduced its newest vehicles and manufacturing technologies in Japan first.
A New Approach to EV Manufacturing
One of the most significant features of the new Lexus EV will be gigacasting, a manufacturing process that uses large casting machines to produce major sections of a vehicle’s body as a single piece.
Instead of joining numerous smaller stamped components together, gigacasting can reduce the number of parts and manufacturing processes required. Toyota says the technology could reduce the weight of affected body structures by around 20 per cent, potentially helping improve an EV’s driving range.
The technology was pioneered at scale by Tesla and has since attracted interest from other major car manufacturers.
Why China?
Toyota’s decision to introduce the new technology in China highlights the country's growing influence on the global EV industry.
China is now the world's largest EV market, with local manufacturers developing vehicles at a rapid pace and competing heavily on technology, price and production efficiency. Toyota is responding by giving its Chinese operations a greater role in developing its future electric vehicles.
The new Shanghai facility will be Toyota’s first wholly owned EV manufacturing plant in China rather than a joint venture. The company is investing around 14.6 billion yuan, or approximately A$3 billion, in the facility.
Initial production of the Lexus EV is expected to be around 1,000 vehicles per month before increasing to tens of thousands annually from 2028.
What It Could Mean for Future EVs
Toyota has not yet confirmed the name, specifications or whether the Shanghai-built Lexus EV will be exported to Australia.
However, the bigger development may be the manufacturing technology behind it.
By developing gigacasting in China alongside the country's established EV, battery and electronics supply chains, Toyota could gain valuable experience that may eventually influence how its electric vehicles are produced in other markets.
For Toyota, the move signals a willingness to learn from the world's largest EV market and rethink how quickly new technology can move from development into production.
As competition in the global EV market continues to intensify, manufacturing efficiency could become just as important as battery range, charging speed and vehicle technology.
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Source: Drive – Toyota’s next EV to come from China with Tesla-style gigacasting
