Toyota Motor in talks to build Lexus factory in Shanghai, report says

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davidlovelexus

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Tyronne M

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"Toyota Motor will establish a wholly owned company in Shanghai to develop and produce electric vehicles and batteries for the Lexus brand, with production set to start in 2027, the world's top-selling automaker said on Wednesday.

In a statement, Toyota said the unit would develop a new Lexus EV and that initial production capacity would be about 100,000 units a year."

 
CRSKTN

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Somewhat understandable but still a questionable move. This could (will) turn out poorly for Toyota long term.
 
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ssun30

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CRSKTN said:
Somewhat understandable but still a questionable move. This could (will) turn out poorly for Toyota long term.
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They are only the second foreign brand to be allowed full ownership of the factory, and they gain access to the most cost competitive supply chain (BEV and ICEV included) in the world.

Chinese Lexus models are already heavily customized for the market and have been using Chinese supply chain for a long time (for example their infotainment is sourced from Huawei).
 
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Sulu said:
Why? How?
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You dont put any meaningful IP inside of China.

A lot of TMCs know how is process, this will ultimately find its way to Chinese OEMs.

I can't imagine these factories are latest and greatest.

If anything this could mean Toyota now has what it considers a step change in manufacturing so now its ok to expose older stuff.

Or not, just guessing.
 
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ssun30

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They have no meaningful know how in BEV manufacturing. They are the ones that need to learn from Chinese OEMs, which in turn learned from Tesla.

Their JV factories were already using the most advanced TNGA process way back in 2018. Their GAC factory earned their highest quality (overseas) awards 5 years straight.
 
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Sulu

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ssun30 said:
My mistake. Huawei infotainment is used by Camry not ES yet. But the Shanghai produced Lexus will use Huawei.
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It makes sense. It saves on effort and expenses to localize the infotainment interface, and it is excellent goodwill to source major components locally.
 
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Sulu

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CRSKTN said:
You dont put any meaningful IP inside of China.

A lot of TMCs know how is process, this will ultimately find its way to Chinese OEMs.

I can't imagine these factories are latest and greatest.

If anything this could mean Toyota now has what it considers a step change in manufacturing so now its ok to expose older stuff.

Or not, just guessing.
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Yes, don't use latest processes or technology there.
 
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davidlovelexus

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Sulu said:
Yes, don't use latest processes or technology there.
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The new factory will not only produce Lexus brand pure electric vehicles, but will also introduce "epoch-making production technologies", which may include technical experiments such as solid-state batteries and giga die-casting and also the advanced L3 autonomous driving may from solution supplier like Momenta. Othewise the car will not have full advantage than the competitors in 2027.
 
CRSKTN

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I guessed that the only way theyd do it is to vend in chinese IP + prior gen processes.

Id bet their internal work on stuff like solid state is ahead of what the chinese could provide.
 
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ssun30

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CRSKTN said:
I guessed that the only way theyd do it is to vend in chinese IP + prior gen processes.

Id bet their internal work on stuff like solid state is ahead of what the chinese could provide.
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I still don't understand why you insist they will use "prior gen process" in that factory. Their "prior gen process" has proven to be unable to produce BEVs profitably. Toyota lost money on every BZ4X and RZ sold, and their only profitable BEVs are badge-engineered local designs like BZ3 and BZ3X. Why would they intentionally lose money?

And we have every reason to believe Toyota no longer has the best process in the industry when they fail to solve the Type 21 V35A main bearing issue 4 years after that variant of the engine launched (and we still don't know if the original Type 17 V35A has the same problem, just because there are so few high mileage LS500 out there). It's definitely not a first model year problem and we still have no conclusion on whether it really is a flaw in the production SOP or the fundamental design of the engine. And now we also see A-pillar weld point failures, fuel tank punctures, and rear crash beam failures on the ES, and electric door lock failure on the LM. Their recent track record doesn't inspire the same level of confidence in the brand like 5 years ago.
 
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sl0519

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ssun30 said:
I still don't understand why you insist they will use "prior gen process" in that factory. Their "prior gen process" has proven to be unable to produce BEVs profitably. Toyota lost money on every BZ4X and RZ sold, and their only profitable BEVs are badge-engineered local designs like BZ3 and BZ3X. Why would they intentionally lose money?

And we have every reason to believe Toyota no longer has the best process in the industry when they fail to solve the Type 21 V35A main bearing issue 4 years after that variant of the engine launched (and we still don't know if the original Type 17 V35A has the same problem, just because there are so few high mileage LS500 out there). It's definitely not a first model year problem and we still have no conclusion on whether it really is a flaw in the production SOP or the fundamental design of the engine. And now we also see A-pillar weld point failures, fuel tank punctures, and rear crash beam failures on the ES, and electric door lock failure on the LM. Their recent track record doesn't inspire the same level of confidence in the brand like 5 years ago.
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Their FWD models have always been developed with cost-saving in mind, so it’s hardly any surprise to see design flaws emerge over time. The only advantage left for Lexus is their reliability but if that reputation falters......then there's little justification for choosing a Lexus, especially when there are plenty of alternatives that offer much superior performance and cutting-edge technology - even if they come at a slightly higher price.
 
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