Toyota is in discussions with Shanghai authorities regarding the possibility of establishing a wholly owned manufacturing facility in the city, similar to the privileges granted to Tesla, according to sources familiar with the matter cited by Bloomberg.
The Japanese automaker seeks comparable benefits enjoyed by Tesla, including tax incentives, policy backing, land grants, and the unique ability to operate factories independently without local joint-venture partnerships in China. Tesla’s Shanghai plant, inaugurated in late 2019, stands as China’s first fully foreign-owned automotive manufacturing venture.
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Sources indicate that Toyota intends to utilize the prospective facility to manufacture electric vehicles (EVs) under its upscale Lexus brand.
While Shanghai officials are reportedly keen on attracting additional foreign investment from major corporations, finalizing terms may necessitate approval from China’s central government, underscoring that discussions remain fluid and subject to change.
Toyota, the world’s leading automaker, faces challenges in China, including a decline in market share alongside other Japanese manufacturers amidst rapid growth by local automakers.
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The company currently operates primarily through joint ventures with GAC Group and FAW Group, with GAC Toyota reporting a 14.8 percent year-on-year decrease in retail sales to 292,377 vehicles from January to May this year, according to the China Passenger Car Association.
Recent reports indicate Toyota’s strategy to introduce plug-in hybrid electric vehicle (PHEV) models through its Chinese joint ventures within the next few years, potentially adopting BYD’s DM-i technology. Additionally, GAC Toyota announced collaboration with local startup Momenta to develop an intelligent driving system, slated for debut on Toyota’s bZ3X model.
