Toyota Motor Corporation announced Wednesday to sign a comprehensive partnership agreement on carbon neutrality with Shanghai and will establish a new wholly owned company in the city's Jinshan district to develop and produce battery electric vehicles (BEVs) and batteries.

Under this partnership with the Shanghai municipal government, Toyota, which has been present in the Chinese market since 1964, is looking to contribute to China's goal of achieving carbon neutrality by 2060. With a focus on sectors including hydrogen energy, automated driving technology and battery recycling and reuse, the new company in Shanghai will expand cooperation with the whole industrial chain in the Yangtze River Delta region while providing quicker product supply and better service catering to the demands of Chinese consumers.

The newly formed company will develop a new BEV under the Lexus brand, and its production is set to start in 2027. The initial production capacity will be around 100,000 units per year, and approximately 1,000 new jobs are planned for the start-up phase, according to the company.

This partnership also demonstrates the appeal of the Chinese market for foreign funds. Shanghai always welcomes global investors and will continuously deepen opening-up efforts, aiming to create a market-oriented, law-based and internationalized business environment, as well as provide high-quality, efficient and tailored services for foreign businesses, according to the Shanghai Municipal Commission of Commerce.