Japanese vehicle makers look to China for EV growth
Mazda, Toyota and Nissan are focusing on EV production in China with local partners. This has implications for European EV investment by Chinese vehicle companies
Japanese consumers’ enthusiasm for electric vehicles (EVs) is even lower than it is in Europe; and with US demand for EVs growing more slowly than had been hoped for, it is not surprising that Japanese vehicle companies are turning back to hybrids in Japan and North America. Although they have not entirely given up on battery-powered vehicles, their EV focus is increasingly on China, Europe and, in the case of Suzuki especially, India.
The expectation that the EU will reach a minimum price agreement with the Chinese authorities will make Chinese production for European demand even more appealing
Mazda shifts EV production strategy towards China
A good example is Mazda which has changed its global EV strategy reflecting the slowdown in the take-up of EVs in Europe and the US. It has delayed the start of production of its first EV in Japan until 2029, pushed back from 2027. Instead, it will focus on production in China. The Mazda 6e sedan – produced by Mazda’s joint venture with Changan in Nanjing – started exports to Europe in September last year. In mid-2026, Mazda will add an SUV version (called CX-6e) to its European line-up, also supplied from the Nanjing factory. Both models will be sold in Australia as well, with the 6e also due to go on sale in Thailand, and the SUV version also sold in New Zealand.
It is worth noting that Mazda has decided to source EVs from China despite the additional tariffs which the EU has levied. Chinese costs, and the use of Chinese-sourced LFP (lithium iron phosphate) batteries mean that Chinese-made EVs are still price competitive. The expectation that the EU will reach a minimum price agreement with the Chinese authorities will make Chinese production for European demand even more appealing. Whether this will also have the effect of reducing the enthusiasm for Chinese companies to consider manufacturing in Europe will be interesting to observe.
Toyota and Nissan look to local partners in China
Meanwhile, Toyota and Nissan have strengthened their EV manufacturing in China by focusing on locally developed EVs. The two companies have done this in association with local partners, Nissan with Dongfeng for the N7, Toyota with GAC (Guangzhou Automotive) for the current bZ3. The bZ3 was launched in March 2025 and had sold more than 70,000 units by the end of 2025. The bZ3 (sold at a price equivalent to just under US$16,000) and Toyota’s forthcoming larger sedan, bZ7, are described as “smart” EVs. The bZ3 features autonomous driving, with level 2 autonomy. The model also uses low-cost LFP batteries, sourcing from local company Zenergy Battery Technologies. The bZ7 is expected to have the same autonomous capability and batteries.
Nissan saw its overall registrations in China fall last year by 6.3% (an improvement over the 12% decline in 2024); this relative “improvement” was largely due to the strong performance of the first locally developed EV targeted at the Chinese market. The N7 sedan also features level 2 autonomy supplied – like Toyota – by Momenta. The N7 uses locally sourced LFP batteries from Sunwoda. Having been launched in April 2025, it achieved c50,000-unit sales by the end of the year. Nissan also hopes to boost its presence in China with a plug-in hybrid version of the N7, to be called N6. The price of these vehicles is much lower than their equivalents would be in Europe, with vehicles in China priced at the equivalent to just over US$17,000 for the N7 and just over US$14,000 for the N6.
The focus on Chinese EV production by Nissan and Toyota may also have an impact on their EV production plans in Europe. There has been some industry “chatter” that the Nissan N7 could be made in Sunderland...
Such base prices mean that, even allowing for the addition of transport and delivery fees, these vehicles would be very competitively priced in Europe were they to be sold there. They would retain this competitiveness even with the additional EU’s supplementary EV tariffs or the minimum prices for Chinese exports to the EU expected to be agreed soon between the Chinese authorities and the EU.
Picking up excess European EV production capacity
The focus on Chinese EV production by Nissan and Toyota may also have an impact on their EV production plans in Europe. There has been some industry “chatter” that the Nissan N7 could be made in Sunderland, a factory which certainly has spare capacity. Dongfeng wants to expand into Europe and could also use the Sunderland factory for production of vehicles under its own brand, as well as potentially the N7 for Nissan. The N7 would also fill a gap in Nissan’s European line-up as it lacks a sedan which several of its European competitors have retained despite the move to crossovers.
Meanwhile, Toyota has decided to make its first EV for Europe in its factory in the Czech Republic in Kolin. Production, of the yet unnamed model, is due to start in 2028, with initial volumes expected to be c80,000 a year. This will be a B-segment vehicle, smaller than then bZ3. Next Toyota must decide when and where to make a C segment electric vehicle, to replace or supplement the hybrid Corolla made in the UK. A decision on this is expected in the next 24-36 months.
Interestingly, there has also been some press reporting and industry “chatter” suggesting that Chery potentially making at a JLR factory in the UK. how realistic this possibility is remains to be seen. Despite the focus on China for EV production by Toyota and Nissan, the move by the Chinese vehicle companies to Europe will likely continue; it is just a matter of how quickly and when they make their next moves. Adding to this theme, Geely is said to be in talks about having some production in Europe at the Ford plant in Valencia, where there is plenty of excess capacity.
