2023 Lexus RX/RZ Lineup Improved, But Is It Enough?

Image courtesy of Lexus

I’m covering the variety of new midsize luxury crossovers announced on May 31st. Details on the most exciting all-electric RZ and RX plug-in hybrid aren’t available, but the enhanced RX 350, RX 350h, and RX 500h F Sport Performance are discussed and compared to the 2022 lineup and other options. I’ll be traveling to Toyota/Lexus North American headquarters this week to learn more.

Image courtesy of Lexus

I know many people are upset with Toyota’s conflicting words and actions on electric vehicles, as we have covered with regards to its strategy of reducing carbon by using smaller batteries and its hydrogen obsession. I wrote about Toyota 9 months ago, explaining that Toyota is increasing fuel economy, reducing emissions, and electrifying all the accessories in its cars by adding hybrids and plug-in hybrids to its fleet as the models go through their regular refreshes. This is very different from their previous strategy of having their Prius line of vehicles use hybrid technology and not having hybrids in 90% of their “regular” cars and trucks. Toyota and Lexus are purchased as “safe choices” by their owners. They usually aren’t the best in most specifications versus the competition, but they are always decent cars and have a reputation for reliability and good resale value.

2022 RX vs 2023 RX

From www.fueleconomy.gov

The RX line has switched from V6 engines to turbocharged 4 cylinder engines as many cars have done over the last few years. There have been some reports that turbocharged engines are less reliable, but that is probably why Lexus waited until now to make the switch. Turbochargers are now common and the bugs should have been worked out. What is disappointing is the fuel economy is only 4% (1 MPG) better for the new generation at a cost of 7% of the horsepower (20 HP). Weight savings of up to 198 pounds means the new base model should be 0.2 seconds faster zero to 60 mph, even with less power. So, overall, not much of an upgrade for a 6 year redesign.

In the first quarter of 2022, only 16% of Lexus RX sales were hybrid. Considering its little sister, the NX, is over 30% hybrid and PHEV after its redesign last year, let’s hope with the 2023 lineup of 5 RX/RZ models being one conventional gas option, 2 hybrid options, a plug-in hybrid (PHEV ) option, and an all-electric option (RZ), that the majority of sales will be in the 4 electrified versions.

The RX 350h is a slightly bigger upgrade over the 450h it replaces. It gets 10% better fuel economy (3 MPG) at a cost of 21% of the horsepower (62 HP). Weight savings and other improvements allow the new model be a half a second faster zero to 60! The old 450h required premium fuel, which eats up a lot of the fuel savings. Let’s hope the 350h doesn’t require it.

The 500h F Sport Performance is a huge performance improvement over the 2022 350 F Sport, which was just made to look faster and handle better but had the same engine as the base model. The new 500h F Sport gets 26 MPG, which is 4 MPG less than the 450h F Sport, but 4 MPG more than the RX 350 Sport. The 22% increase in power along with the lighter weight and other improvements allow the new model to be 1.8 to a full 2 ​​seconds faster in zero to 60 times. This allows Lexus to be competitive with most luxury crossovers in acceleration for the first time. They are still a long ways off of the mid 3 second times of the fastest BMW and Tesla competitors, but they are showing some progress. The PHEV model may be even faster!

There are interior upgrades (such as the center screen being upgraded from 12 to 14 inches) and safety upgrades that make the new models more completive, but I’ll cover those in a future article.

Why Lexus Buyers Should Choose The Hybrid

The base 350h getting 24 MPG should use 8,333 gallons over its 200,000 mile life. Now, I realize the original buyer won’t likely keep the car for 200,000 miles, but the value of enhanced fuel mileage will help with the resale value, so it works out about the same whether you keep the car or not. The RX 350h getting 33 MPG would use 6061 gallons, a difference of 2272 gallons. Assuming gas prices average $5 a gallon over the life of the car (current prices are $4.61 nationwide), the hybrid would save $11,362 over the lifetime of the vehicle. Looking at recent Lexus offerings, I’d expect the hybrid to only be a $2,000 to $3,000 upgrade over a comparably equipped non-hybrid model, so you should get back the hybrid premium financial over the first 3 years and enjoy savings after that.


Two years ago, I compared the Model Y with the Lexus RX (which was the top selling luxury crossover at the time) and thought the Model Y would jump to the top of the sales charts and dethrone the RX. Tesla doesn’t publish sales figures by model and region, but Troy Teslike estimates that 48,835 Model Y crossovers were sold in the first quarter, while Toyota reported that 26,795 RX crossovers were sold. So, it looks like Tesla didn’t just dethrone Lexus, it sold 82% more. Tesla has a 3- to 12-month wait to get a car (depending on the options), while a search of CarGurus.com shows 2,746 Lexus RX available to purchase (including 14 within 10 miles of my house). This has surely been a wakeup call to Toyota/Lexus management, and this redesign may allow them to keep more of their market share, depending on how many of the hybrids, PHEVs, and full EV versions of the model they can make. I can’t imagine anyone buying the base model unless they just want a nice vehicle and drive fewer than 5,000 miles a year. The hope is that Lexus is able to move their customers that aren’t ready for fully electric cars at least to a hybrid and get them used to attempt some of the advantages of electrification, giving Lexus a few more years to make up for their years of neglecting electric cars in favor of other technologies.

Disclosure: I am a shareholder in Tesla [TSLA]BYD [BYDDY], [NIO]XPeng [XPEV]and Hertz [HTZ]. But I offer no investment advice of any sort here.



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