By on February 19, 2018

2018 Lexus NX front – Image: Lexus

As we told you last fall, Lexus took a hatchet to the price of its hybrid NX crossover for 2018, greatly narrowing the gap between it and its NX300 sibling. The model’s entry price fell by more than $2,000, essentially making the hybrid powertrain a $950 option on an all-wheel drive NX.

It’s not a strategy designed to get more hardcore greenies into Lexus dealers; rather, it’s a way of swaying the modestly eco-minded into springing for that all-important “h.” Despite early signs of success, Lexus is holding off on taking its pricing gambit brand-wide.

The NX isn’t alone in offering a more-affordable hybrid option. Lexus’ popular RX crossover, which adds a lengthened three-row variant in April, sees a similar drop in hybrid pricing for 2018. A stock RX 350 with all-wheel drive retails for just $1,025 less than the RX 450h. On the RX 350L, going hybrid commands a $1,550 premium. Prior to 2018, the price gap between hybrid and non-hybrid RX models neared six grand.

“We have your true environmentalists, and you can certainly appeal to that group of buyer, but to broaden the appeal we felt compelled to bring that premium down,” said Lexus general manager Jeff Bracken in an interview with Automotive News. “The No. 1 focus was we want to make this powertrain available to more people.”

The automaker hopes to improve its corporate fuel economy through boosted hybrid sales, thus keeping it in the EPA’s good books.

2018 RX 350L

Key to the new strategy is equipment. Instead of heaping goodies on hybrid models, further inflating MSRPs, the brand’s hybrid crossovers carry the same standard equipment as the gas-only versions. While the ES soldiers on under the old content strategy, buyers kicking the tires on the new LS sedan or LC coupe can expect to pay an extra $4,510 for the hybrid powertrain and nothing else.

Bracken wouldn’t say whether the next-generation ES, expected later this year, will join its stablemates in the discount hybrid game.

In January, hybrids made up 13 percent of U.S. NX sales, up from 7 percent a year earlier. While overall NX sales rose 41.9 percent last month, sales of the hybrid model rose 155.9 percent. Sales of the RX line increased 22.1 percent in January, with sales of the hybrid variant up 31.6 percent.

[Images: Lexus]

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22 Comments on “Lexus Is Pretty Confident Buyers Will Go Green If They Don’t Have to Pay the Price...”


  • avatar
    IBx1

    Smart move to get their CAFE up by not tying the powertrain to the extra feature packages.

  • avatar
    Tandoor

    The second photo looks like a small sedan emerging from its crossover cocoon.

  • avatar
    brn

    Lincoln has never charged more for a hybrid MKZ than they have for a non-hybrid MKZ. Lexus’s big move still has them charging a grand more for a hybrid. Come on Lexus!

  • avatar
    stuki

    Would be more interesting, if they could pull of the same in their Toyota line, where lower markup keep things more “honest” wrt. costs.

    Otherwise, Avalon/Camry (assuming the new ES gets with the Lexus program), and Highlander hybrid sales, would effectively be a bit disincentivized.

    • 0 avatar
      sportyaccordy

      Avalon, maybe. Camry hybrid has a good bit of breathing room from the Lexus, and the Highlander is much more practical than the RX-L. And Toyota sells enough of everything that they can afford a little cannibalization to boost their CAFE numbers. I think it’s a smart play.

  • avatar
    dont.fit.in.cars

    Or mid level features bumping to premium territory and the need to value add.

  • avatar
    stingray65

    The problem with hybrids is that they actually add several thousand dollars extra to the cost, particularly when adding in amortization of the development costs, but with fuel at $2-$3 per gallon the payback period for the consumer on the higher purchase price is basically forever. Toyota can certainly lower the hybrid price premium, but that is just going to lower their profits, which they seem to have decided is worth it for PR purposes or to avoid CAFE related fines.

    • 0 avatar
      bd2

      That’s why going with a 48V mild-hybrid system is a good compromise (until batteries become lighter/cheaper).

      65-70% of the benefits for only around $800 in added costs.

      Add to that the improvements in efficiency for ICE and a mild hybrid makes even more sense.

    • 0 avatar
      brandloyalty

      @stingy
      Toyota should hire you to run their company.

      Hybrids are not that costly to engineer. And you don’t suppose the development cost has been spread over how many million hybrids?

  • avatar
    don1967

    With so many grants and subsidies, when was the last time anyone “paid the price” for going green?

    Green is the colour of other people’s money.

    • 0 avatar
      stingray65

      If you own stock in an auto company that is forced to produce money wasting hybrids and EVs, you are “paying the price” for going green. If you are a taxpayer in any country that provides green vehicle subsidies you are also “paying the price” for going green, even if you don’t own a car yourself.

      • 0 avatar
        mcs

        @stingray: “forced to produce money wasting hybrids and EVs”

        Hybrids and EVs aren’t just about going green. Toyota’s hybrids are probably the most reliable vehicles on the road. Every Prius owner I know has even avoided maintenance like brake replacements even after 150k miles.

        EVs aren’t just about going green either. I’m a huge fan of big V8s and V12s. I love the smoothness and torque of those power plants. With an EV, I get even better smoothness and better torque without the maintenance. The instant connection with the road without a transmission in the way can’t be replicated by an ICE powered car.

        At one point this was an auto enthusiast site and some of us still remain. I personally want the best performance regardless of politics or even if that performance means dealing with issues like vehicle range, crappy interior, half-assed assembly quality, or the fact that the company CEO is allegedly Satan’s spawn. I don’t care. Give my f-ing instant torque. I don’t even care if the company misses production deadlines. Not my problem.

        There’s another side of electrification that you don’t see. It’s having a positive impact on the defense and robotics industry. The same technology being developed for EVs is being used to power robotics. In some cases, I’m using the same charging technologies and the same battery packs that have been developed by the auto industry. Someday, enemies that threaten our freedom will have to face a force that is all machines. The boots on the ground will be powered by that same EV technology that you claim is a waste of money. Technology so quiet that they won’t hear it coming. Technology that will save American lives.

        I’m sure you were upset when you were younger and the buggy companies started to get pushed out of the way by competitors that started powering them with complicated motors. With a horse, you had an almost unlimited range because you could easily fuel it by letting it graze at the side of the road. Why waste all of that money to develop oil fields when horses were perfectly fine and much more reliable. But, progress happens.

        • 0 avatar
          stingray65

          MSC – your horse example is perfect, because the market decided – no subsidies were involved. In fact, it wasn’t just a choice between the horse and gasoline, but between gasoline, steam, or electric, and even gas-electric hybrid, and gasoline won due to superior range, faster and less frequent “refueling”, and better all around performance. I like many hybrids and electrics, I just don’t think taxpayers should be subsidizing the car purchases of the mostly very wealthy people that buy them. If electrics or hybrids are truly better, people will buy them without needing to be bribed to do so.

  • avatar
    JohnTaurus

    14 comments and no mention of “virtue signalling”? Oh, its Toyota/Lexus. Never mind.

  • avatar
    TW5

    The average person doesn’t want the “h”. The average person is resistant to the “h” because they aren’t one of those KGB soothsayers who believe in the four unicorns of the CO2 apocalypse. No, average buyers are nice normal people who just want the regular model so they can fit in with their friends.

    So make the hybrid version the normal version. The NX300 gets the 2.5L I4 hybrid powertrain. Then offer an NX400 (or whatever) F-Sport with a hefty premium.

    Most buyers will reject the F-Sport because they aren’t coal-rolling conspiracy theorists who kill the world with their assault rifles and their confederate flags. No, average buyers are nice normal people who drive hybrids without “h” badges, and who just want to fit in with their neighborhood.

    Making the standard model a hybrid would mess with the competition, too, because the nice normal person’s luxury CUV would get over 30mpg combined. Anything making 25mpg combined would be for klansmen who assassinate polar bears and anything with an “h” badge would be for eco-terrorists who make their poodles take anti-depressants. Normal people don’t drive cars like that.

  • avatar
    Richard

    Besides lowering the price of the hybrid variants RX & NX., the current lease residuals are 2 points higher hense the lease payments are lower.

    [email protected]


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