Like most legacy automakers, Toyota is struggling to keep up in China’s intensifying EV market. However, the company isn’t planning to back down like some of its peers. Toyota wants to make “even better cars” while ramping output to keep pace with domestic leaders like BYD.
Toyota wants to build as many as 3 million vehicles a year in China by 2030. That’s nearly double the 1.75 million cars built there last year.
According to a new Reuters report, the Japanese auto giant plans to overhaul its business in the region. Three sources familiar with the plans said Toyota aims to bring sales and production closer in China while giving local leadership more control.
The plans drastically differ from the reports last year that Toyota’s joint venture partner, FAW, was cutting production and jobs in the region because of the “severe market environment.”
Nonetheless, Toyota wants to revamp its business in China after losing significant market share to domestic leaders like BYD.
BYD is coming off its eighth straight record sales month after selling over 500,000 NEVs (plug-in hybrids and EVs) for the first time.
Toyota is struggling to keep pace in China’s EV market
According to data from CnEVPost, BYD dominated China’s NEV market last month with a commanding 36.1% (431,367 units sold) share. The company is now ramping up production and bolstering its workforce to meet the demand.
Meanwhile, Toyota’s global output fell for the first time in four years in the first half of fiscal 2025. Toyota’s domestic output fell 9.4%, while overseas production slipped nearly 6%.
Toyota had the biggest drop in China, with production plunging 17% as it struggles to keep pace amid a wave of low-cost rivals (that are often even more advanced). For example, BYD’s cheapest EV, the Seagull, starts at under $10,000 (69,800 yuan) in China.
In a response to Reuters, Toyota said “With the intense competition in the Chinese market, we are constantly considering various initiatives.”
Toyota added it aims to continue making “even better cars” in China to revamp brand sales in the region.
One of the sources said Toyota needs to rely more on local leadership to speed up development or “it will be too late.”
Toyota aims to leverage its local partners to gain an edge. This strategy is in stark contrast to that of other Japanese automakers, including Hona and Nissan, which are retreating from China with shrinking sales and profits.
Electrek’s Take
With China’s EV market becoming flooded with low-cost EVs, automakers are looking overseas to drive growth.
BYD and others are already top-selling EV brands in key auto regions like Southeast Asia and Central and South America. They are also quickly gaining a presence in Europe.
Although BYD is best-known for its super affordable EVs like the Seagull and Dolphin, the company is rapidly expanding with new luxury models, smart mid-size electric SUVs, and electric supercars hitting the market.
China is the world’s largest EV market, but with domestic automakers gaining a foothold overseas, legacy automakers could feel even more pressure.
After topping Honda and Nissan for the first time in global vehicles sales, BYD is now closing in on Ford on shipments this year.
How long will it be until BYD catches up to Toyota and Volkswagen? Let us know what you think in the comments below.
