On the first working day of the Year of the Snake, Toyota Motor announced

Lexus has set up a super factory in Jinshan

It is adjacent to the Triowin Smart Jinshan Factory

(Source: Recent drone aerial photography by Triowin）

Toyota officially announced

The Jiefang Daily reports that on February 5th, the first working day of the Year of the Snake, Toyota Motor Corporation (hereinafter referred to as "Toyota") officially announced that the new LEXUS project would be launched in Shanghai, deciding to establish a Lexus pure electric vehicle and battery R&D and production company in Jinshan District. This marks Toyota as the second foreign automaker to build a wholly-owned factory in China after Tesla. Shanghai is welcoming a new landmark in manufacturing.

Toyota stated that the Chinese market has the most vigorous actual demand for new energy vehicles represented by pure electric vehicles, and the related technologies lead global development. The new company will rely on the advanced and mature industrial chain foundation, logistics network, talent system and market scale of Shanghai and the Yangtze River Delta region to develop LEXUS brand pure electric models, reflect the expectations of Chinese customers in the products at the Chinese speed, and plans to go into production in 2027. According to the plan, the initial investment for this project is approximately 5 billion yuan, providing 1,000 job opportunities.

At the same time, Toyota stated that while the new company is pursuing environmental friendliness, it will also invest epoch-making innovative production technologies in the new factory, striving to create production frontline application scenarios that are different from the past.

（Source: Jinshan Daily）

（Source: Toyota Official Website）

Regional planning

According to the "Preliminary Plan for the Revision of the Control Detailed Planning of Unit JSS3-0405 in Jinshan Industrial Zone, Jinshan District, Shanghai" released by the People's Government of Jinshan District on November 8, 2024, it is clearly stated that the area for this revision of the planning is located in the Shanghai Bay Area High-tech Zone of Jinshan District (formerly Jinshan Industrial Zone), which belongs to the industrial base clearly defined in the town's master plan. Jinshan District plans to introduce new energy vehicle and cutting-edge battery industry projects. To ensure the land demand for key industrial projects, this planning proposal intends to adjust the blue line of the river, public green Spaces, and the road traffic system. At the same time, it will merge relevant plots, clearly define the scope, floor area ratio, and building height of industrial plots, and thus initiate this planning revision."

Adjustment scope: The planned area extends eastward to the urban development boundary, adjacent to Shenhai Expressway, southward to Langong Road, westward to Tingwei Road, and northward to Jinshan Industrial Zone Avenue, with a land area of approximately 252.52 hectares.

Led by giants

Rolling back the clock to six years ago, in January 2019, Tesla's Shanghai Gigafactory broke ground, setting the "Shanghai speed" record of "starting construction, completion, production and listing in the same year".

Tesla's Shanghai Energy Storage Gigafactory has maintained its high efficiency. From its official construction in May last year to its current official production, it has only taken over eight months, once again setting a new "Shanghai speed" record. Just yesterday, on February 11th, the first super-large commercial electrochemical energy storage system, Megapack, rolled off the production line at the Shanghai Energy Storage Super Factory.

In 2023, the output value of Tesla's Shanghai factory was 230.6 billion yuan, roughly equivalent to three Shanghai Petrochemical plants, ten Qifan Cable plants, and seventy Hehui Optoelectronics plants.

In 2024, the Shanghai Gigafactory rolled off the production line for its 3 millionth vehicle and exported its 1 millionth vehicle to overseas markets. The annual delivery volume exceeded 916,000 vehicles, accounting for half of Tesla's global deliveries.

Toyota Motor Corporation announced on January 30 that its global sales for 2024 were 10,824,480 vehicles. Toyota's sales volume far exceeded that of the German giant Volkswagen (VW), which is competing for the top spot globally, by approximately 9.03 million units, ranking first for five consecutive years. As a representative of imported luxury brands, Lexus, a brand under Toyota Motor Corporation, has always been committed to integrating elegant Oriental charm into its products, thus forming a distinct brand characteristic. In 2024, in the face of a complex market environment, Lexus continued to focus on niche markets. Relying on its differentiated product lineup and the brand's comprehensive competitiveness, it achieved steady growth in sales.

Data from the Passenger Car Market Information Joint Branch of the China Automobile Dealers Association shows that both the sales volume and market share of traditional luxury brands are on a downward trend in 2024. From January to October, the sales volume of luxury brands decreased by 8.3% year-on-year. During the same period, Lexus's sales in the Chinese market reached 149,000 units, up 7% year-on-year, making it the only imported luxury car brand to see growth, demonstrating the market's recognition of its products.

Production will start in 2027, which coincides with the schedule previously announced by Toyota for solid-state batteries. Toyota is preparing to launch the official mass production of solid-state batteries in 2026. According to Toyota, its solid-state batteries have demonstrated significant technical advantages in terms of energy density, safety, charging speed, cycle life, and low-temperature performance.

Meanwhile, in January this year, there was a historic change in the senior management of Toyota China. Li Hui, the executive vice president of Lexus China, was promoted to general manager of Toyota China. This is the first time since Toyota entered the Chinese market in 1964 that a non-Japanese executive has served as the general manager of Toyota China, and it is also the first Chinese general manager of Toyota China. Toyota is further sending out signals of its localization in China.

The industry is thriving

A thriving industry is the intrinsic driving force for a region to achieve high-quality development.

With Toyota taking this historic step, Lexus will finally witness its moment of domestic production in two years. Toyota's new Gigafactory, with a planned annual production capacity of 100,000 units in the initial stage of operation and an average selling price of 300,000 RMB per vehicle, is expected to achieve this. Assuming all the vehicles produced were sold out, the sales revenue that year could reach the level of 30 billion. Based on a gross profit margin of 20%, it can generate a gross profit of 6 billion yuan in a year, which is equivalent to approximately driving a GDP of 6 billion yuan. However, if the impact of the supply chain is taken into account, it is usually multiplied by a coefficient of 2 to 3, meaning that the direct contribution to GDP may even exceed 18 billion. In its long-term plan, Toyota expects to sell 3.5 million electric vehicles by 2030, of which 1 million will be Lexus.

According to Toyota's plan, the Lexus wholly-owned factory will be in line with Tesla's Shanghai Gigafactory, aiming to achieve a local parts usage rate of over 95%. The products are not only targeted at the Chinese market, but will also be exported to Japan and other overseas markets in the future. According to relevant media reports, after the news broke last year that Lexus intended to start domestic production, many domestic supply chain enterprises attempted to enter the Lexus supply chain system and use it as a springboard to export overseas. This will not only directly boost employment, but also promote the development of surrounding supporting industries, further driving the economic growth of Shanghai.

In the historical coordinates of China's automotive industry development, the establishment of a wholly-owned factory by Lexus holds epoch-making significance. This marks the completion of a paradigm shift in China's manufacturing industry policies from "market for technology" to "platform empowerment".

When Tesla's Shanghai Gigafactory broke the joint venture equity ratio limit, China had already demonstrated to the world the confidence of its mature industrial chain. Lexus chose to enter the market at this time precisely because it saw that China's manufacturing system has the capacity to undertake the production of high-end models - from high-precision mold processing to AI quality inspection systems, the intelligent equipment industrial cluster formed in the Yangtze River Delta region enables "Japanese craftsmanship" to no longer rely on the technological protection of traditional joint venture models. On the land of China in the new era, new fruits of intelligent manufacturing with new quality productivity have been borne.

This transformation has overturned the decision-making logic of traditional multinational automakers. In the past, luxury brands insisted on "original imports" to maintain their premium prices. Now, however, they are voluntarily relocating their core manufacturing processes to China.

In the current context of escalating global geopolitical conflicts, Toyota's large-scale investment in setting up a factory in Shanghai holds significant indicative value. Relevant media interpretations suggest that Lexus's entry into Shanghai this time reflects the city's appeal to manufacturing enterprises and also plays a leading and driving role in the development of the Hangzhou Bay Economic Belt.

For 26 years since its establishment, Triowin has always adhered to the business philosophy of "Japanese-style management, German-style technology, and Chinese-style humanism", which reflects the craftsmanship culture of Triowin people who integrate the strengths of many, put people first, and strive to make China's voice heard on the international stage.

After 26 years of deep cultivation, we are now embracing this new opportunity. We firmly believe that by adhering to the value of "progressive learning ability" and striving for greater heights, we will continuously seize the technological high ground of domestic high-performance industry-specific aircraft. "Marching towards the new and constantly developing the new quality productivity of the industry leader in intelligent manufacturing system engineering!"

As neighbors of Toyota and Lexus, we jointly cheer for Jinshan and create new heights for China's intelligent manufacturing.

Declaration

The above calculation is based on the assumption that Lexus electric vehicles can achieve an annual production and sales volume of 100,000 units in the future.

2. The calculation method of GDP is rather complicated and cannot be directly equated with the gross profit of enterprises. This article aims to illustrate the impact of the new factory on Kingsoft through rough calculations. The calculation results are for reference only. Please point out any obvious errors.

3. The industrial data in the text is sourced from public information of the government and enterprises as well as relevant media reports. The specific situation shall be subject to the official disclosure.