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New Lexus hybrid: No price premium over itself

July 20, 2009 | 12:26 pm

Lexus HS When it comes to luxury hybrids, the cost/benefit equation generally shows ugly results.

Perhaps the most extreme example would be the Lexus LSh, which starts at $106,910. That's a roughly $22,600 premium over the non-hybrid, fully loaded LS, despite only a 3 mpg bump up in efficiency. That means it would take several decades, at least, to break even on cost, based on normal driving and today's gas prices.

Carmakers hate those kinds of comparisons, since they tend to convince shoppers to go for the cheaper car and instead find other ways to be green. It may help explain why the non-hybrid LS outsells the hybrid by a ratio of 30 to 1.

Toyota has a proven solution: eliminate the possibility of comparison. It worked wonderfully for the Prius, which is the world's best-selling hybrid and happily has no non-hybrid version to rival it.

Now the Japanese auto giant is trying it with a new Lexus dedicated hybrid, the HS 250h, which it announced in Detroit earlier this year and has since been EPA rated at a combined 35 mpg.

Set to hit dealerships late next month, it has no conventionally powered doppelganger and will start at $34,200, Toyota said today.


That's more expensive than a fully loaded Prius or a Camry hybrid, yet comfortably under the least expensive Lexus hybrid. The closest thing Toyota makes, in price point, is the Lexus ES, but at 22 mpg combined, it doesn't really compare.

Whether putting the HS on the road alone will prove a winner in the way it has for the Prius -- or not so much for the Honda Insight, which has faced tepid sales to date -- remains to be seen. Last month, it was reported that Toyota was downgrading its annual sales expectations for the HS to 25,000 units from 30,000.

According to Lexus's general manager, Mark Templin, the niche market the HS 250h serves is "forward-thinking, well-informed entry luxury consumers" who are "seeking a social statement and technology with a clear benefit."

The question, then, is a clear benefit over what?

-- Ken Bensinger

Photo: Lexus HS 250h

Credit: Toyota Motor Corp.

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