Japan's Toyota Motor is set to build a wholly-owned plant in China to produce Lexus electric cars, according to Nikkei.

A report late Monday said that Toyota has decided to build a new electric car manufacturing plant in Shanghai, which will mainly produce models under its luxury brand "Lexus".

The investment is said to be different from past joint ventures, and for the first time, Toyota will build and operate the plant on its own.

Sources familiar with the matter said that Toyota has already identified a site in Shanghai for the plant, which is expected to be operational around 2027 and will mainly produce Lexus vehicles for the Chinese market.

In response to the news that a wholly-owned plant will be built in Shanghai in 2027, Lexus China said Tuesday that it had "no comment on this unofficial information".

If the news is true, Toyota will become the first Japanese automaker to build an independent plant in China.

Currently, Toyota's production in China is handled by joint ventures, with FAW Toyota and GAC Toyota established in partnership with FAW Group and GAC Group respectively.

In 2023, Toyota produced 1.75 million vehicles in China. However, Lexus models rely heavily on Japan for production and are exported to the Chinese market.

Lexus plans to realize 100% of its sales in China, North America and Europe in 2030 as pure electric vehicles, and to reach 1 million annual EV sales globally.

On top of that, Lexus expects to be purely electric globally by 2035.