In recent news, multiple outlets reported that Lexus, the luxury vehicle division of Toyota, was set to establish a new electric vehicle (EV) factory in China, with production slated to begin in 2026. However, Lexus has officially denied these claims, stating that there are no current plans for domestic production in China.

The initial reports suggested that Lexus would build a wholly-owned factory in Shanghai, which would produce the UX hybrid model and a new electric car. Speculation arose that the electric car could be a production version of one of the concept cars, the LF-ZC or LF-ZL, showcased at the Beijing Auto Show earlier this year. Despite these rumors, Lexus clarified that any such plans are premature and not yet finalized.

A person familiar with the matter mentioned that if Lexus were to build a factory in China, it would focus on producing pure electric models rather than hybrids. This aligns with the broader market trend in China, where there is a limited demand for non-plug-in hybrids like the UX300h, especially when a fully electric version, the UX300e, is available.

The confusion seems to have originated from a June 29 report, which stated that Toyota was seeking similar treatment to Tesla for Lexus in China. This included tax breaks, policy support, land grants, and the ability to operate without a local joint venture partner. While Shanghai authorities have been in contact with Toyota, many uncertainties remain regarding the implementation of such a plan.

Unlike its competitors, Nissan's Infiniti and Honda's Acura, which established joint ventures in China in 2013, Lexus has been cautious about local production. Despite reaching significant sales figures in China, Lexus has repeatedly postponed plans for domestic manufacturing¹. In 2019, Lexus sold 202,000 cars in China, including Hong Kong, but this number dropped to 181,400 last year due to the rapid increase in electrification¹.

Cui Dongshu, Secretary General of the China Passenger Car Association, noted that building a manufacturing plant in China would offer Lexus competitive advantages in the local market. However, for now, Lexus remains focused on its goal of achieving 100% electrification by 2035 without committing to a specific timeline for establishing a factory in China.