Toyota plans to use its own giant casting presses at $2 billion Lexus plant in China

Toyota $TM Motor intends to build electric vehicles at its Lexus plant in Shanghai, a $2 billion project, using gigacasting equipment it developed internally, according to Bloomberg. Construction of the plant is ongoing, and car production is slated to begin there in 2027.

Toyota Chief Technology Officer Hiroki Nakajima said the company is creating the technology for the site itself, responding to a question about whether it is purchasing gigacasting equipment from a vendor in China. "This is a big chance to change the manufacturing system," Nakajima told Bloomberg in an interview in Brussels. "Every time, the starting point is in house."

The Lexus plant will be the first place Toyota uses the giant presses, according to Bloomberg. Toyota is testing the technology in Japan at the moment, the company said. It declined to comment on potential suppliers.

Tesla $TSLA pioneered gigacasting, and BYD and Xiaomi use it. The presses cast whole sections of a car's chassis as a single piece, taking the place of dozens of components that used to be welded together. According to Bloomberg, the process lowers expenses and reduces the time, machinery and labor that production requires.

The technology has drawbacks, Bloomberg said. It costs a lot to adopt, and it limits how easily manufacturers can shift between models. Accidents can end up costing more to fix, since the components needed as replacements are bulkier.

Carmakers commonly partner with die-casting suppliers, including Italy's Idra Group and China's Haitian, to customize the machines for their requirements, according to Bloomberg.

Toyota is trying to gain ground in China, a market where homegrown brands lead the EV segment. Toyota's China sales have slid 19% over the year's first eight months. Bloomberg reported that Toyota and carmakers from Europe are up against a contracting market, as a prolonged property-sector slump leads shoppers to hold off on costly buys.

Nakajima spoke at Toyota's technical center in Brussels, where the company previewed work in progress on engines for hybrids, electric vehicles and fuel cells powered by hydrogen.