Toyota to produce EREVs in China from 2027, targeting 400,000 units annually in 2028

Toyota is preparing to expand its electrified line-up in China with a new type of vehicle. According to multiple media reports, the Japanese carmaker plans to develop and produce extended-range electric vehicles (EREVs) in China, with production scheduled to begin in April 2027.

For Toyota, which has built much of its reputation around hybrid technology, the move would add another powertrain option to its China line-up as competition in the country's new-energy vehicle market continues to intensify.

Production starts in April 2027

According to the reported plan, Toyota's China EREV project will begin production in April 2027.

Production is expected to start at a relatively low rate of several hundred vehicles a month before gradually ramping up. Toyota is targeting around 200,000 vehicles in 2027, followed by a further increase to around 400,000 units in 2028.

If those targets are reached, EREVs could quickly become an important part of Toyota's electrified business in China.

For comparison, Toyota sold around 200,000 BEVs globally in 2025, along with around 180,000 PHEVs. That means the planned EREV production capacity in China alone would be roughly twice Toyota's global BEV sales in 2025.

Toyota looks beyond the BEV "price war"

Toyota's decision to enter the EREV market comes as competition among pure-electric vehicles in China becomes increasingly intense.

Chinese carmakers have been expanding production capacity and cutting prices to compete for market share, putting increasing pressure on margins.

A Toyota China executive said the company needs to remain flexible as the market becomes increasingly focused on pure EVs, rather than getting drawn into an endless price-cutting battle.

An EREV offers Toyota another way into the market. The powertrain combines electric drive with a small petrol engine that acts as a generator, allowing the vehicle to retain the smoothness of electric driving while using petrol when the battery needs to be recharged.

For drivers who regularly travel long distances or have limited access to charging, that can also reduce the need to plan around charging stops.

Why EREVs are gaining attention in China

EREVs are sometimes described in China as the "fifth type" of electrified vehicle, alongside BEVs, PHEVs, HEVs and fuel-cell vehicles.

As NEV adoption continues to rise, Chinese consumers are also becoming more selective about how they use their cars. For drivers who often travel long distances, an EREV can offer electric driving for everyday use while retaining the option of refuelling at a petrol station when needed.

Other Japanese carmakers are also starting to move into the segment. Dongfeng Nissan, for example, has introduced an EREV version of its NX8 SUV.

Toyota's entry would add another major Japanese brand to an EREV market that has so far been dominated by Chinese carmakers.

Multi-pathway strategy

Toyota has long promoted its multi-pathway approach to electrification, arguing that different markets need different solutions based on local energy sources, charging infrastructure and customer needs.

The company continues to develop HEVs while expanding its BEV and PHEV line-up. Adding EREVs in China would give Toyota another powertrain to work with in a market where consumer preferences and competition are changing quickly.

With production expected to begin in April 2027, more details on Toyota's China-made EREVs are likely to emerge as the project moves closer to launch.