Toyota to build extended-range EVs in China starting 2027, targeting large-scale production to avoid price war

# What Toyota announced Toyota will produce extended-range electric vehicles (EREVs) in China beginning in spring 2027. The company plans to make roughly 200,000 EREVs that first year and increase production to about 400,000 units in 2028. Production will take place in China, where Toyota already has joint ventures and a supply chain for EV components.

An extended-range EV primarily drives on electric power but carries a small gasoline engine that charges the battery when its state of charge is low. Compared with a battery-electric vehicle (BEV), an EREV typically has a smaller battery. Compared with a plug-in hybrid (PHEV), the onboard gasoline engine is smaller and is used mainly to generate electricity rather than directly drive the wheels most of the time.

• Driving feel: EREVs drive more like EVs than conventional hybrids or PHEVs because electric motors handle propulsion most of the time.
• Efficiency: EREVs are less efficient than pure BEVs because they burn gasoline when the engine runs.
• Cost and complexity: They can be cheaper to buy than large-battery BEVs in some cases, but they require more maintenance than BEVs because of the internal-combustion engine.

# China

A Toyota executive said competition in China has fixated on battery EVs and led to price wars, and that Toyota needs to avoid being dragged into that competition. For Toyota, EREVs are a strategic option to offer differentiated products at higher price points than many low-cost BEVs.

# How this fits with Toyota's broader electrified lineup and China strategy EREVs will become Toyota's fifth electrified category alongside BEVs, PHEVs, HEVs (traditional hybrids), and FCEVs (fuel-cell vehicles). Toyota has already been increasing its use of Chinese suppliers, software, batteries, and manufacturing practices for new vehicles.

# Short-term implications for buyers and the market

• EREVs may appeal where charging infrastructure is still developing or where buyers want EV driving experience without the range anxiety trade-offs some associate with BEVs.
• For Toyota, this is a way to expand electrified offerings while using China-based supply chains and joint ventures to control cost and ramp production quickly.

# What to watch next

• Official Toyota model details for the EREV (range, battery size, engine specs).
• Pricing and positioning versus low-cost domestic BEVs.
• How China's incentive rules and regulatory environment treat EREVs compared with BEVs and hybrids.