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Why Lexus isn't worried about increased electrified rivalry from Genesis, Volvo, Mercedes-Benz and other luxury brands as it launches its 2023 RZ electric SUV

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Lexus reckons slow, steady and a lot of hybrids will help it win 'electrified' race.
Lexus reckons slow, steady and a lot of hybrids will help it win 'electrified' race.
Tom White
Senior Journalist
25 May 2023
4 min read

Lexus was once a clear leader in the electrified space, having launched its first hybrid luxury vehicle, the RX 400h, years ahead of its storied German and Swedish rivals, and well before Hyundai had even launched its Genesis luxury brand.

The brand’s first dedicated electric vehicle, the RZ mid-size SUV, launches into a different landscape, one where rivals like Mercedes-Benz has a plethora of fully electric offerings, Volvo is onto its second-generation EVs, and there are new brands in the space like the quickly electrifying Genesis and all-electric Polestar.

When asked whether Lexus Australia is concerned about this increased competition, the brand’s local boss, John Pappas, explained there were certain factors which set Lexus apart, and allowed it to maintain a loyal audience.

“We always respect the other brands and what they do,” he said. “We’re always focused on what we need to do - we think we’re bringing products out at a certain time which suit the market. The new RX is 85 per cent electrified - it’s actually well exceeded what we had planned. 

“This is what I mean by customers choosing what they want. Having BEV with the RZ gives us a new opportunity to see what our customers have to say about battery electrics in the luxury space.”

Pappas said that the Lexus strategy of offering multiple drivetrain options - from naturally aspirated V8s to hybrids and fully electric vehicles was very deliberate. 

“It’s part of our strategy to have a diversified approach,” he explained. “Our buyer is diverse.”

“We don’t think people should be spending $50k extra on a car if they don’t need to, just because it’s electric. We were the pioneers in this electrified luxury field. We want to be technology agnostic instead of focusing on one specific powertrain.”

Pappas’ comments echo the strategy and comments of Lexus’ parent company, Toyota, which is yet to launch its version of the e-TNGA-based EV, the bZ4X mid-sizer.

The RZ will be limited to 500 units in its first 12 months on sale.
The RZ will be limited to 500 units in its first 12 months on sale.

Toyota’s local Vice-President of Sales and Marketing, Sean Hanley, explained to media earlier this year that the brand’s initial volumes of bZ4X SUVs will be limited, and has continually warned that the model will not be on the affordable end of the spectrum.

“Battery electric cars are expensive, don't kid yourself,” he told media in January of 2023. “What's important about bZ4X is it's our first launch of a full battery electric vehicle into the Australian market.”

“So safety, quality, reliability, durability, and building trust around that car is what's most important to us, not speed to market. And certainly not volume, because [the shift to] BEVs is a once in a lifetime, generational change.”

The Lexus RZ, meanwhile, will be limited to just 500 units in its first 12 months on sale, in a single all-wheel-drive 450e variant across two trim levels, Luxury and Sports Luxury.

The UX300e is attracting a six- to eight-month waiting list.
The UX300e is attracting a six- to eight-month waiting list.

Pappas said 150 of those initial 500 are already spoken for, while the expressions of interest number at around 1500, suggesting a solid waiting list if you were to order now.

The luxury marque’s only other fully electric vehicle, the UX300e small SUV is also attracting a six- to eight-month waiting list.

Despite relatively low supply for its electric models, Lexus said its electrification plans are well on-track in Australia with ‘electrified’ sales which encompasses hybrids, plug-in hybrids, and fully electric vehicles making up 46.3 per cent of the brand’s local sales mix, well above its global mix which is currently sitting around 36 per cent. 

Lexus Australia said all things were looking up as the brand was securing increased supply of its most popular hybrids, with its April sales figures hitting an all-time high of 60.4 per cent. Lexus’ ultimate target is 80 per cent electrified sales by the end of 2025.

Tom White
Senior Journalist
Despite studying ancient history and law at university, it makes sense Tom ended up writing about cars, as he spent the majority of his waking hours finding ways to drive as many as possible. His fascination with automobiles was also accompanied by an affinity for technology growing up, and he is just as comfortable tinkering with gadgets as he is behind the wheel. His time at CarsGuide has given him a nose for industry news and developments at the forefront of car technology.
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