Lexus Is Pretty Confident Buyers Will Go Green If They Don't Have to Pay the Price

Steph Willems
by Steph Willems

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.

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]

Steph Willems
Steph Willems

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  • TW5 TW5 on Feb 20, 2018

    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.

  • Richard Richard on Feb 20, 2018

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

  • Lorenzo Subaru had the ideal wagon - in 1995. The Legacy Outback was a straight two-box design with rear quarter and back windows you could see out of, and was available in brown with a 5-speed manual, as God and TTAC commenters intended. It's nice they're not raising prices, but when you've lost the plot, does it matter?
  • Bkojote Remember a month a go when Cleveland wanted to create a more walkable Cleveland and TTAC's 'BIG GOVERNMENT IS THE PROBLEM' dumbest and dullest all collectively crapped their diapers? Here's the thing- look on any American highway and it's littered with people who don't /want/ to be driving or shouldn't be. Look at every Becky on her phone during the morning commute in her Tucson, look at every Brad aggro driving his 84 month loan GMC. Hell look how many drivers nowadays can't even operate a headlight switch. You expect these people to understand a stoplight? In my neighborhood alone 4 people have been rear ended at lights from someone on their phone. Distracted driving over the past 10 years has spiked, and it's only going to get worse unless Becky has an alternative, because no judge is going to pull her license when 'she needs it to get to work!' but heaven forbid she not check fb/tiktok for 40 minutes a day.
  • Scott Shouldn't the The Italian Minister for Business be criticizing The Milano for being too ugly to be Italian?Better use of resources doing that....
  • Steve Biro Frankly, while I can do without Eyesight and automatic start-stop, there is generally less B-S with Subarus in terms of design, utility and off-road chops than with many other brands. I just hope that when they adopt Toyota’s hybrid system, they’ll also use Toyota’s eCVT.
  • The Oracle These are all over the roads in droves here in WNC. Rarely see one on the side of the road, they are wildly popular, capable, and reliable. There is a market for utilitarian vehicles.