Lexus hybrid sales surge nearly 50% as brand plans to ditch petrol engines

The renewed Lexus RX crossover next year will prioritize hybrid engines, but the non-electrified RX350 is still expected to account for 35% of sales.

Luxury automaker Lexus is considering the question of when it should abandon gasoline-only engines in its various model lines as the share of customers preferring hybrid powertrains is growing at a rapid pace.

Managing Director of Lexus Australia John Dads told Chasing Cars this week that a sign the brand should ditch petrol-only engines is that they’ve fallen to around 10% of a given model’s sales balance.

“If it was 10% or less, you would really start to understand that people are talking. … If that were to become true, then you would definitely be wondering about the future range in terms of gasoline [engines]of course, Pappas said.

Lexus hybrid sales would be 60% without supply problems

Just under 50% of all Lexus sales in Australia are vehicles with hybrid engines, but this number is artificially limited by supply constraints, especially hybrid cars, due to their higher consumption of semi- drivers, of which there is currently a significant shortage.

Pappas told Chasing Cars that if supply were normal, sales of Lexus hybrids in Australia would already be around 60% of the total. Despite supply issues, Lexus’ share of hybrid sales in Australia is growing at a healthy pace. In 2020, hybrids accounted for 33% of local sales.

Next year’s fifth-generation Lexus RX has two hybrid engines and a traditional petrol offering

Examining Lexus’ order banks provides solid clues about what customers want to buy, supply aside. Around 75% of Australian orders for the company’s highly demanded NX mid-size SUV are either the NX350h series parallel hybrid (from $65,600) or the NX450h+ plug-in hybrid ($88,323), with the top-of-the-line PHEV alone accounting for 12 % of NX orders.

Despite the significant and accelerating shift in Australian buyer preferences towards hybrid powertrains, Lexus has retained the “legacy” non-hybrid petrol engines for mainstream buyers who are “not ready” to own an electrified vehicle, in the language by Papas.

Most buyers want the hybrid, but a minority are ‘not ready’

Chasing Cars has driven the next-generation RX large SUV which is due to arrive in Australia in early 2023 – with reviews to come soon – and while the new model’s base powertrain will now be the RX350h hybrid, a gasoline engine. non-hybrid gasoline RX350 will remain available. Pappas expects this turbocharged four-cylinder RX350 to make up 35% of sales.

Lexus NX350
75% of Australian orders for the Lexus NX are for hybrid engines

But when it comes to the smaller NX midsize SUV – a vehicle with a generally younger buyer population – only 1 in 4 Australian customers place an order with a Lexus dealership for a non-electrified petrol engine.

However, the proportion of actual sales of non-hybrid NX engines is over 25% because their low popularity means that waiting times are shorter.

Lexus public relations spokesman Paul Ellis told Chasing Cars that a gasoline NX buyer can expect to wait about six months for delivery, compared to more than 12 months for a hybrid.

Rear of the 2022 Lexus ES 300h Sports Luxury
The Lexus ES sedan was hybrid only until 2021 when a gasoline engine was reintroduced

Pappas argues that despite the clear shift in buyer patterns in favor of hybrid engines, there is still a strong base of customers in Australia who prefer traditional petrol engines.

“There are enough customers talking and saying that [keeping the] gasoline is a good viable option for [the new RX]…over time this will evolve in terms of customers switching more to electrification once they know more about the technology alone, but [for plug-in hybrid,] they are more confident in the infrastructure,” Pappas said.

More hybrids on the cards across the Lexus lineup

Part of the story is the bias of older buyers for the RX model, which itself has historically high loyalty and retention rates for Lexus in Australia, although Pappas is optimistic the next-generation car will attract younger family customers – being similar customers to the hybrid – NX buyer magnets.

Lexus’ ES mid-size sedan was hybrid-only in Australia between 2019 and 2020, but a price-point non-hybrid ES250 engine was added to the lineup in 2021. Hybrid power is an extra-cost option on the UX small SUV and the brand’s midsize NX. SUV, as well as the LS limousine.

2022 Lexus LX600 SUV black - front 3/4 static shot #1
The rugged Land Cruiser-based LX could be the last Lexus to be electrified

The last Lexus model to be hybrid-only in Australia may be the four-wheel-drive LX. Lexus parent company Toyota has committed to having a hybrid powertrain for every model in its Australian lineup in 2030, and a V6 petrol-electric hybrid engine is already available in North America with Toyota models that share the LX’s GA-F platform.

The fifth-generation RX will be released in Australia in Q1 2023 with two hybrid powertrains – the non-turbo RX350h and the turbo RX500h – plus the non-hybrid turbo RX350.

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