Lexus Slashes Prices to Boost Sales and Meet ZEV Mandate
Lexus, the luxury arm of Toyota, has made significant price cuts across its lineup in an effort to stimulate sales. The most notable price reduction is on the entry-level electric model, the UX 300e, which has been cut by up to £7100. Additionally, the RZ 450e, another electric model, has been reduced by £2100. The hybrid models NX 450h+ and RX 450h+ have also seen price cuts, making them more affordable for potential buyers. However, the LBX model, which was released earlier this year, has not received any price adjustments.
These price cuts by Lexus are likely a response to the stagnating sales in the UK’s new car market. In June, the market grew by just 1.1%, with private sales experiencing a decline of 15.3%. By reducing prices, Lexus aims to reinvigorate its sales and potentially achieve its best year in the UK. In the first six months of 2024, the brand sold over 8000 cars, more than half of the previous year’s record-breaking sales.
The price reductions on the RZ and UX models also indicate Lexus’s commitment to meeting its Zero Emission Vehicle (ZEV) mandate target. According to the law, 22% of a car maker’s total sales in 2024 must be comprised of electric vehicles. However, demand for electric models in the private market has been slowing down, with a year-to-date decline of 11%. By cutting prices and increasing affordability, Lexus aims to secure its ZEV mandate target early. Currently, Lexus’s EV sales share stands at around 30%.
Lexus is not the only manufacturer offering price cuts or incentives to boost sales. Audi is providing a £14,000 contribution on the E-tron GT, BMW is offering £4167 towards the iX xDrive 50 M Sport, and Volvo is providing an £8000 contribution towards the XC40 Recharge. These offers are in the form of deposit contributions, making it easier for buyers to afford these electric models.
In conclusion, Lexus’s decision to slash prices across its lineup is a strategic move to stimulate sales and meet its ZEV mandate target. By reducing prices, the brand aims to make its electric and hybrid models more accessible to potential buyers. This not only helps boost sales but also contributes to the overall transition to electric vehicles in the automotive industry. With other manufacturers also offering price cuts and incentives, it is clear that the market is becoming more competitive in the electric vehicle segment.
