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Lexus discounted hybrids to reach beyond 'environmentalists'

by Justin King

The company hopes the narrower price gap will help promote hybrid sales and contribute to lower CAFE ratings.

Lexus has explained its reasoning for narrowing the price gap between traditional powertrains and hybrid variants.

The luxury marque has begun to roll out cheaper hybrid prices for the 2018 model year. Most have dropped by thousands of dollars; the RX 450h was slashed by more than $7,300 to a new base MSRP of just $45,695.

As gasoline prices remain relatively low, Lexus has apparently encountered difficulty pushing its hybrid models for significant price premiums.

"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," brand general manager Jeff Bracken told Automotive News.

The company is now targeting a price discrepancy of just $1,000-$1,500 for hybrid powertrains. Bracken suggests the new strategy aims to help the brand comply with tighter CAFE targets.