Intelligence Finance APP learned that according to insiders, Toyota Motor (TM.US) is discussing the possibility of building a wholly-owned factory with relevant departments in Shanghai. However, as this Japanese auto manufacturer struggles in the Chinese market, this will be a risky move.

Insiders said that Toyota is negotiating to obtain treatment similar to that of Tesla (TSLA.US), including tax breaks, policy support, land subsidies, and the ability to own and control the factory directly without local partners.

Insiders said that the world's largest auto manufacturer will use the factory to produce Lexus's high-end electric vehicles.

Although Toyota, like most foreign automakers, has performed poorly in the fiercely competitive Chinese market, CEO Koji Sato adopted a 'electric vehicle priority' strategy after taking office in April last year. Under this strategy, Lexus is seen as the pioneer of Toyota's launch of millions of electric vehicles in the coming years. In October last year, Toyota launched a Lexus electric vehicle concept car.

Sato later clarified that electric vehicles are simply a 'missing puzzle' in Toyota's 'multi-path' strategy. The company's goal is to sell 1.5 million electric vehicles annually by 2026 and 3.5 million annually by 2030.

Toyota produces Lexus models in factories in Japan and North America, all of which are fully owned by Toyota. Toyota sold 840,681 vehicles worldwide in May, with Lexus accounting for 8.6%, most of which were exported to North America and Asia. In the same month, Toyota sold 13,229 pure electric vehicles, including those with the Lexus logo.

In the Chinese market, Toyota faces fierce price wars and competition from local brands. Although Toyota leads globally, its Chinese shipments have been declining annually for the past three years. Despite the launch of the new Camry, the company's monthly sales in China in May fell nearly 14% compared to the same period last year.