Honda would continue to keep its supply chain in China for the domestic market in the world's second-largest economy, while building a separate one for markets outside of China, the report said.
Toyota said there was "a possibility" that it could lower its full-year production plan of 9.7 million vehicles as it faces a continuing shortage of parts due to the COVID-19 lockdowns in China.
The expansion, if it goes ahead, would give Tesla EV-dedicated production capacity in the world's largest auto market on a par with more established brands in China.
Toyota's new EV will be slightly bigger than its compact Corolla, the world's best-selling car of all time. One source told Reuters that the vehicle is like a "Corolla with bigger back-seat section."