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Toyota negotiating for Tesla-like treatment for its potential Shanghai plant: report

Credit: Toyota North America

A recent report has suggested that Japanese automaker Toyota is looking to secure some Tesla-like treatment for its potential Lexus plant in Shanghai, China. The proposed facility, provided that it does get built, will reportedly produce electric vehicles for Toyota’s premium brand, Lexus. 

There is no denying that stars aligned for Tesla Gigafactory Shanghai. Before it became Tesla’s largest factory today by output and primary vehicle export hub, Giga Shanghai secured a notable amount of support from the Chinese government in the form of tax breaks, policy support, and land grants, to name a few. Most importantly, Tesla was also allowed to own and directly control Giga Shanghai without a domestic joint venture partner. 

Giga Shanghai proved very lucrative for Tesla, and China has since taken pride in the fact that it was able to aid Tesla in the buildout and ramp of its most productive factory in the world to date. Citing people reportedly familiar with the matter, Bloomberg News noted in a recent report that Toyota is currently discussing a potential Lexus EV factory with Shanghai authorities, and the carmaker is negotiating for treatment that is similar to what Tesla has received for Giga Shanghai.

The publication’s sources noted that Shanghai authorities are indeed open to attracting more large foreign investments. However, some details of such investments may require the approval of the central Chinese government. With this in mind, Bloomberg‘s sources noted that the talks between Shanghai authorities and Toyota are likely still far from being finalized. 

Toyota, for its part, has not issued a comment about Bloomberg News‘ recent report.

Toyota has played by China’s traditional auto rules in the past. The automaker currently has joint ventures with local automakers like the GAC Group and FAW Group. Toyota’s sales in China, however, have been seeing some headwinds this year so far, as noted in a CNEV Post report. In the January to May 2024 period alone, GAC Toyota’s domestic sales in China went down 14.8% year-over-year to 292,377 vehicles, as per data from the Chinese Passenger Car Association (CPCA). 

GAC-Toyota’s sales of 292,377 from January to May 2024 effectively make the joint venture seventh among China’s top automotive brands. FAW Toyota’s sales during the period were not enough to enter the rankings. 

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Toyota negotiating for Tesla-like treatment for its potential Shanghai plant: report
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