What's the difference?
When the Lexus RZ launched in Australia just over two years ago CarsGuide questioned the Japanese luxury brand’s relatively late arrival to the EV party.
And since then, this large, premium, battery-electric, five-seat SUV has proved something of a niche player with less than 100 sold in 2024 and a similar number in prospect for 2025.
But there’s been movement at the RZ station. This comprehensively updated model features a revised powertrain, retuned suspension, tweaked AWD system and the availability of things like steer-by-wire and a tricky manual mode in the auto transmission.
And yes, Lexus claims it’s more refined than its already smooth and near-silent predecessor.
Scheduled to hit local showrooms in the first half of 2026, we were invited to take a first drive at its global launch. So, read on to see if this could be your next electrically propelled, performance luxury, family favourite.
Think of a Mercedes-AMG and the first words that spring to mind are probably not - understated, efficient and restrained. And yet those are probably the best words to describe the all-new C 43.
Of course, before we go any further it’s important to note that the C 43, even in its previous six-cylinder guise, was never meant to be as wild, raucous or powerful as the C63 flagship - that’s simply not its role in the AMG line-up.
But even so, this new model is a dive into fresh territory for the brand and puts a very different spin on the AMG sports sedan as we know it.
This is a four-cylinder model, complete with a Formula One-derived electric turbocharger, so it lacks the sound and fury you expect from something carrying the ‘AMG’ badge - but that doesn’t mean it’s a bad car, as we’ll explain.
Smooth, quiet, quality sums up this new and improved Lexus RZ. But will tricky new tech like steer-by-wire and a manual mode in the F Sport's auto transmission be enough to sway more premium electric SUV buyers its way? Fold in this car’s value proposition as well as the brand’s spectacular ownership package and it just might be.
Note: CarsGuide attended this event as a guest of the manufacturer, with travel, accommodation and meals provided.
The new AMG C 43 may lack the drama and excitement we’ve come to expect from the German performance brand, but that doesn’t mean it’s a bad car. Yes, it could be more extroverted and the ride could be improved, but this is still a sharp-looking sports sedan with loads of punch.
This is a car that speaks to its times, with ever-stricter emissions regulations making it harder and harder for car companies to produce loud, wild and charismatic cars. So Mercedes-AMG has worked within those boundaries and come up with a car that retains at least some of those core elements that has made the brand so desirable over the years.
Note: CarsGuide attended this event as a guest of the manufacturer, with accommodation and meals provided.
Not a tremendous amount of change in terms of exterior design for this update with the brand’s signature angular treatment retained including a prominent snub nose and 20-inch rims on both variants of the car.
The top-spec F Sport picks up extra aero-focused elements, particularly around the lower bumper at the front, as well as aero covers on the wheels and at the back a spoiler on the tailgate as well as a faux diffuser at the bottom of the lower bumper.
Not much has changed inside either except for a steering wheel-shaped elephant in the room in the form of a yoke that goes with the steer-by-wire function on the 550e F Sport. A significant, eyebrow-raising departure.
However, the curved instrument binnacle, central 14-inch multimedia screen as well as the design of the centre console remain unchanged.
Having said that, there are new ‘laser-patterned’ designs in the door card trims and dynamic lighting graphics in the doors, as well.
The functionality of the touch-dimmable panoramic roof has also been improved and it works beautifully.
Mercedes has created something of a problem for itself with its decision to introduce AMG styling packages for the majority of its range, including the C-Class.
It means the C 43 has to walk a fine line between looking like a unique AMG model, rather than just a C300 with a bodykit and not out-doing the C63.
To that end it has AMG’s now familiar grille with vertical bars, the unique and complex-looking 20-inch alloy rims and a small lip spoiler on the boot. But otherwise it is surprisingly understated for an AMG, lacking the more obvious and muscular stance of previous AMG offerings.
Inside, there’s a similar theme, with the typical Mercedes-Benz luxury appointments but with a sportier, AMG twist. The steering wheel is chunky and comes with AMG branding, metallic shift paddles and a pair of rotary dials/buttons that allow you to alter the various drive modes and settings.
The one on the right allows you to switch between the pre-set Comfort, Sport, Sport+ and Individual modes, while the one on the left can scroll between the various individual aspects to tailor the settings to the conditions.
In typical modern fashion the design is tech-laden, with a digital display for the instrument panel (that can be switched between various graphics) and a large, tablet-style central multimedia touchscreen that controls the majority of the car’s non-driving functions.
At a fraction over 4.8m long, close to 1.9m wide and a bit more than 1.6m tall, with a 2850mm wheelbase, the ZR is a sizeable machine.
There’s plenty of breathing space in the front and in terms of practicality the first thing that jumps out, or rather it doesn’t, is the lack of a conventional glove box.
But there is a large box between the front seats to take its place, with the lid (which doubles as a centre armrest) performing the Lexus party trick of being able to open towards the driver or passenger.
There are two cupholders in the centre console with a wireless charging pad ahead of them, plus decent bins in the doors for bottles and other bits and pieces. An additional tray sits under the main, flying buttress-style upper console.
For power and connectivity, there are USB-C sockets for charging and media as well as a 12-volt socket in the lower console section.
Getting into the back is easy thanks to wide-opening doors and a large entry aperture and seated behind the driver’s seat set for my 183cm position I’ve got hectares of leg- and headroom. Shoulder room is best for two full-size adults rather than three, which would be a short-journey squeeze. Three up to mid-teenage kids will be fine.
In terms of storage there are pockets on the front seatbacks, bins able to hold a large bottle in the doors and two cupholders in the fold-down centre armrest. Individual ventilation control for rear seat passengers is always welcome.
Then for power, there are two USB-C outlets and a ‘house-power’ socket underneath them. The 550e F Sport also includes heating controls for the two outer rear positions.
Lower rear axle packaging enhances boot space with a generous 522 litres on offer, expanding to 1451L with the 60/40 split-folding second row lowered. Tie-down anchors and bag hooks are a thoughtful touch and there are handy storage boxes under the flat floor, ideal for charging cables.
The standard power tailgate is nice, while a repair-inflator kit instead of a proper spare isn’t. Braked trailer towing capacity is a handy 1.5 tonnes.
The new C-Class has grown slightly in size compared to the model it replaces, most notably with a 26mm increase in the wheelbase which you can feel in the cabin.
The front seat space is good, with excellent adjustability for the power-adjustable seats and steering column. I had no trouble finding my ideal seating position which makes for a more enjoyable and uncompromised driving experience.
Rear space is a bit tighter (which is typical for this segment/size of vehicle), but thankfully the standard seats do have very deep sculpting in the backs which allow for more knee space and foot room.
However, at approximately 180cm (six-foot), I wouldn’t like to sit behind my seating position for long periods as my knees were touching the seat back, and headroom is compromised with the panoramic glass roof.
In terms of small item storage there’s a lidded console box in between the front seats as well as a pair of cupholders and a small tray where you can place your mobile phone.
It’s worth noting, though, that early examples of the C 43 in Australia do not have a wireless smartphone charging pad, with that reportedly being introduced from February production.
While that’s good news, it’s not really competitive in this day and age to offer a car costing six-figures without such technology.
There’s also only a single USB-C power outlet in the front, which is another disappointment, but there is a pair in the back.
Mercedes does win some points back for a respectable 455-litre boot, which has a nice wide load opening that will make packing luggage easier.
Lexus says final price and specification for the new RZ will be confirmed closer to its local arrival in the first part of next year. But as a guide, the current entry-level RZ450e in Luxury spec costs around $120,000 before on-road costs. Go for the full-fat Sports Luxury and you can add $10,000 for a $130K MSRP.
Let’s take an educated guess and add a not outrageous five per cent price increase for this update which would bump the new RZ500e (to be offered in Luxury and Sports Luxury grades) past a $125K entry point and move the new RZ550e F Sport flagship close to $140K.
If that was the case, rivals will include the Audi Q8 e-tron (from $153,984), BMW iX (from $136,900), Genesis GV70 Electrified Signature ($125,858) and Polestar 3 (from $118,420).
Worth noting you could buy two examples of the Tesla Model Y Dual motor Long Range ($68,900) for the same money.
In this part of the market it’s fair to expect a healthy list of included features and the RZ doesn’t disappoint.
Aside from the performance and safety tech we’ll get to shortly, standard specification highlights include a 14-inch multimedia touchscreen, a digital instrument display, a dimmable panoramic roof, 14-colour ambient cabin lighting, 20-inch alloy rims, LED headlights, cornering lights and a 360-degree camera system.
There’s also synthetic leather trim (synthetic suede on F Sport), built-in nav, power-adjustable heated front seats, multi-zone climate control and more. Not bad.
We’ll get to the major change under the bonnet shortly, but another significant alteration for this latest C 43 is the price.
It now starts at $134,900 (plus on-road costs), which pushes it well above its market rivals, the BMW M340i xDrive and Audi S4, which start at $104,900 and $106,200, respectively.
However, Mercedes has added more technology under the bonnet and loaded the C 43 up with standard equipment, including its '4Matic' all-wheel drive system, adaptive damping, rear-wheel steering and 20-inch alloy wheels.
In terms of creature comforts, the C 43 is well-appointed, with leather upholstery, a head-up display, augmented reality navigation, a panoramic sliding sunroof, and a Burmester 3D surround sound system.
There are two option packages for the C 43. The 'Digital Light Package' costs $2400 and adds Multibeam LED headlights with 'Ultra Range' highbeam, 'Adaptive Highbeam Assist Plus' as well as active light function and cornering light function.
The 'Performance Ergonomics Package' includes AMG Performance front seats, an AMG Performance steering wheel in Nappa leather and microfibre and the 'AMG Track Pace' system for an additional $5200.
Both versions of the new RZ are powered by dual permanent magnet synchronous motors, one in the front, one at the back, each producing 167kW and 269Nm.
Total output is 280kW for the 500e (up from 230kW in the 450e), with a little more juice released from the motor combination for the 550e at 300kW.
A single-speed transmission sends drive to both axles and the RZ550e F Sport features ‘Interactive Manual Drive’ designed to give the sensation of manual gear shifts in a BEV. More on that in the Driving section.
The biggest talking point about this new car is the engine, with AMG downsizing from the old C 43’s six-cylinder to a 2.0-litre four-cylinder turbocharged petrol engine.
But it’s not just any turbocharged four-pot, because it is fitted with technology that Mercedes claims has been inspired directly from its Formula One team.
While the F1 team engine facility is based in England, this engine was designed and developed by the Mercedes-AMG team at its Affalterbach headquarters, but the concept of the electric turbocharger reportedly comes from the engine that powered Lewis Hamilton to multiple world championships.
The electric exhaust gas turbocharger - to give it its official name - uses a small electric motor on the turbocharger shaft to spin up the blades without having to wait for any exhaust gases to pass through it first.
To power the electric turbo the C 43 is equipped with a mild-hybrid 48-volt electrical system.
Mercedes claims this means reduced lag and improved throttle response for a sportier driving experience.
It also helps make this small engine produce big amounts of performance, with AMG extracting 300kW of power and 500Nm of torque from this 2.0-litre, which is more power than the previous six-cylinder C 43 managed.
The engine is paired to a nine-speed multi-clutch transmission, which isn’t a dual-clutch with a pair of clutches operating on every second gear ratio, but instead uses a “wet start-off clutch” for better take-offs and smoother shifting on the move (at least in theory).
Power is sent to the road via all four wheels thanks to Mercedes’ 4Matic all-wheel drive system.
The RZ500e and 550e are fitted with a 77kWh lithium-ion battery delivering a claimed (WLTP) range of 450 and 456km, respectively.
Claimed 10-80 per cent charge time, using its full 150kW DC fast-charge capacity, is 30 minutes or a handy three and half hours at maximum 22kW AC capacity.
Energy consumption on the combined (urban/extra-urban) cycle is 18.2kWh/100km (WLTP) for the RZ500e and 18.4 for the 550e.
Over several hundred kilometres of B-road and freeway running as well as pottering through slow-speed villages on the launch we saw an average of 19.3kWh/100km in the 500e and 20.1 in the 550e F Sport, which is pretty handy.
And the (very) good news is two AC charging cables, installation of a home charger and three years’ complimentary charging across the Chargefox network is included. Nice!
Despite the smaller engine you can hardly call the C 43 miserly, with a claimed combined urban/highway cycle rating of 9.1-litres per 100km. That’s only a 0.2L/100km improvement over the old six-cylinder.
On test, which included a return trip from Sydney to Bathurst via motorways and some dynamic back road driving, we saw a return of 11.8L/100km on the car's onboard computer.
While hardly hybrid-worrying, it’s impressive to think that driven modestly, such a potent engine can return a single-digit fuel figure.
It’s a hefty machine at 2.1 tonnes, but Lexus says the RZ550e F Sport will accelerate from 0-100km/h in 4.4 seconds, with the 500e only marginally slower at 4.6sec.
In straight-line acceleration Lexus says front to rear power distribution varies between 60:40 to 100 per cent rear to suppress pitching and “produce a more direct acceleration feel”.
And the RZ is indeed quick. Apply your right foot at just about any speed and the car rockets ahead with satisfying enthusiasm.
The F Sport’s ‘manual’ mode allows you to shift through eight virtual ‘ratios’. Press the ‘M’ button on the console and bingo, you have slim steering wheel-mounted paddles to control them.
At anything above a light accelerator application you’ll feel a jolt on upshifts, but it’s rather unpleasant. Sure, you want some sense of a gear change, but you feel it in your core. Check out the video review to see how much it can shake you around.
A synthetic soundtrack Lexus refers to as the “BEV Sound”, vaguely echoing an internal combustion engine, is fed through the F- Sport’s audio system and it feels thin and brittle to our ears. Again, check out the audio sample in our video review to see if you agree.
You’ll hear the ‘revs’ rising on up and downshifts but there’s no physical accompaniment with the latter as far as we could sense.
Suspension is strut front with double wishbones at the rear and it’s been given a thorough revision in terms of dampers, springs and bushings in both the 500e and 550e F Sport, with the latter copping some additional fine-tuning in each of those areas.
We sampled 500e and 550e F Sport versions of the RZ on the launch drive in Southern Portugal, covering mostly Aussie-compliant roads with lots of bumps and ruts to deal with. And despite its hefty kerb weight the car copes with these imperfections well.
There’s also been some extra attention paid to body rigidity in this updated RZ, specifically reinforcement of upper sections of the nose and around the boot to keep the car more torsionally stiff.
In cornering the drive distribution ratio is between 80:20 front to rear to RWD-only, according to vehicle speed and steering angle, and the car feels composed and predictable.
The F Sport features the steer-by-wire system, using a yoke rather than a conventional steering wheel and the ratio is such that all you have to do is turn the wheel slightly to generate a response.
It’s smooth and progressive but quick at the same time. You soon become used to it.
While it's unusual to see a small yoke in your hands rather than a steering wheel, it means you have an uninterrupted view through to the instruments, which is a nice side benefit.
However, much like the Infiniti Q50’s system before it, there is no mechanical link between the driver’s hands and front wheels. Steering inputs are relayed by electric signals from a torque actuator to a control actuator.
So, while Lexus says “important feedback filters through without the unpleasant vibration effects of a mechanical connection”, and that’s true, by definition there is no road feel and the wheel feels numb from that point-of-view. Worth noting the mechanically steered 500e feels much the same.
Tyres are Dunlop SP Sport Maxx (235/50 fr - 255/45 rr) which grip hard and remain relatively comfy despite their short sidewall running on 20-inch rims.
One price you pay for the steer-by-wire system’s set-up is a substantial turning circle, so be ready for that.
Braking is by ventilated discs all around, which work nicely, and when you’re not using the manual mode in F Sport the steering wheel paddles allow movement through four levels of regenerative braking.
The most aggressive setting will slow you quite markedly but not to the level of ‘single-pedal’ operation.
Additional sound insulation includes an under-seat rear floor silencer, soundproofing in the door trims as well liberal use of damping sheets, foam, silencer pads, insulators and extra seals. And the car is super-quiet, even for an EV.
In terms of miscellaneous observations, the front seats on both versions remained comfortable and supportive over long stints behind the wheel (and yoke!).
Slow speed manoeuvring is assisted by a 360-degree overhead camera view with a translucent trace of the car in the centre, as well as a high-quality reversing camera. Vision across the car and through to the back is good, anyway, but the extra tech helps in the slow speed stuff.
There’s also a sensible mix of physical dials and on-screen controls and the touchscreen menus are easy to use. Especially handy when you’re racing to the function that turns off the intensely annoying over-speed warning.
Let’s start with the good news. The new Mercedes-AMG C 43 is a quick car. The engine may be small in size but the electric turbocharger does its thing and provides plenty of punch.
You can get a performance boost, too, thanks to the belt-driven starter generator, which acts as a mild hybrid and gives you a surge of 10kW for a brief period if you need a sudden burst of extra speed.
The chassis is well-sorted, too, at least from a dynamic point-of-view. The rear-wheel steering can provide up to 2.5 degrees of turning, which improves handling at speed and manoeuvrability when parking.
However, there are some less-impressive elements to the C 43, too. The obvious one is the drama, or rather the lack thereof.
As I said at the beginning, the C 43 has never been as wild or raucous as the V8-powered C 63, but when you buy an AMG there’s a rightful expectation that it will provide some thrills.
The C 43 simply doesn’t have that character about it. Yes, it’s fast, but it produces that speed with efficiency rather than excitement.
And it’s not an engine size problem, because even the 2.0-litre four-cylinder A 35 and CLA 35 offer more ‘wow factor’ than the C 43.
Yes, the engine makes noise under acceleration (and it can be altered between discreet and sporty) but even at its best it sounds muted and lacks the evocative tone of a V8 or six-cylinder engine.
Another disappointment is the transmission calibration, with the gearbox awkwardly shifting out of first gear on multiple occasions during our test drive.
In the taller gears it felt smooth enough cruising along, but given its low speed shifts we’d like to spend more time in the urban environment before passing final judgement.
The other notable element of the driving experience we struggled with was the ride quality. While fine on the smoother motorways, our test drive included time on some patchy country back roads and the C 43, even in the ‘Comfort’ suspension setting, was simply too firm.
Riding on low profile tyres, the adaptive dampers struggled to isolate the cabin from the imperfections in the road, leading to a fussy ride at times.
Overall the C 43 is a good car, but it feels like there are still some areas where Mercedes could improve it to make it really live up to the AMG badge.
The RZ received a maximum five-star ANCAP assessment in 2022 scoring 80 per cent-plus results in all areas.
As you’d expect, a full suite of driver-assistance tech is onboard including auto emergency braking (AEB) with car-to-car junction, crossing and head-on functionality as well as pedestrian and cyclist detection, adaptive cruise, lane keeping assist, lane-departure warning, blind-spot monitoring, rear cross-traffic alert, driver fatigue monitoring, tyre pressure monitoring and more.
The airbag count runs to nine, including side curtains, knee bags for the driver and front passenger as well as a front centre airbag. There’s also multi-collision brake to minimise the chances of subsequent impacts after an initial crash and an auto emergency call function.
There are three top tethers for child restraints across the second row with ISOFIX anchors in the two outer positions. That’s a comprehensive safety package.
The C43 gets a comprehensive list of safety equipment that leaves little out. Obviously there are the usual passive safety items, like 10 airbags, including dual-front combined pelvic/thorax airbags and a front centre bag that drops between the front seat passengers to minimise the chances of a head clash.
Also included as standard is autonomous emergency braking front and rear (covering speeds between 7.0-200km/h), adaptive cruise control with active stop/go, a 360-degree parking camera, 'Active Parking Assist', 'Active Lane Keeping Assist', 'Blind Spot Assist' and, of course, anti-lock brakes with 'Brake Assist' and 'Adaptive Brakes' with Hold function and electronic stability control.
Also included are dusk-sensing LED lights, rain-sensing wipers and run-flat tyres with tyre pressure warning.
The C43 also comes equipped with Mercedes’ 'Driving Assistance Package Plus', which adds even more safety gear. This includes 'Active Blind Spot Assist', 'Active Brake Assist with Cross-Traffic Function', 'Active Emergency Stop Assist', 'Active Lane Change Assist', 'Active Lane Keeping Assist', 'Active Steering Assist', and 'Active Stop-and-Go Assist'.
While the C43 hasn’t been specifically crash-tested, the latest C-Class was rated by ANCAP with a five-star score for all models except the upcoming C 63 S E Performance.
The RZ is covered by Lexus Australia’s five-year/unlimited km warranty and there’s an eight-year/160,000km warranty on the drive battery, which is in line with the RZ’s key competitors.
Recommended maintenance interval is 12 months/15,000km, which is relatively brief for an EV.
Capped-price servicing is yet to be confirmed, but for reference the outgoing 450e runs to $395 for each workshop visit up to a maximum of five years/75,000km. That’s sharp pricing in this part of the market.
The RZ also qualifies its owner for ‘Platinum Electrified’ benefits under the ‘Lexus Encore’ ownership program. That means everything from access to “exclusive offers and events” to a complimentary service loan car, five years’ roadside assistance, valet parking at selected locations, airport lounge access and (heaps) more, including the charging benefits mentioned earlier. Hard to argue with that.
The C 43 is covered by Mercedes’ five-year, unlimited kilometre warranty, which has become the new standard for the luxury car market.
Service intervals for the car are at 12 months/25,000km, which is on par with industry standard.
Mercedes-Benz Australia will offer a service plan for the C 43, prices were yet to be confirmed at the time of publication but the company has indicated it will be similar to the C300.
That means $550 for year one, $900 for year two, the third service costs $1000 and the fourth year service costs $2450 - for a total of $4900 for the first four years of ownership.