Toyota Positions Lexus as Its Flagship Electric Vehicle Brand

Toyota is beginning a more concerted effort to develop electric vehicles, and has chosen its luxury brand Lexus over the core Toyota line for the revamp. The current president of Lexus International will also be promoted to CEO and President of all of Toyota, effective April 1.

The implication is the new EV focus at Lexus will guide Toyota’s strategy going forward. Current CEO Akio Toyoda will step down on April 1 amid criticism for his hesitancy to convert Toyota’s lineup to full EVs as its rivals have. Instead, he touted a hybrid-first approach, believing vehicles like the Prius have an important short-term role to play in reducing carbon emissions.

That seems to have, well, gotten him the boot, and going forward Toyota will “accelerate” battery electric vehicle development, though it still plans to pursue several fuel types with a “multi-pathway” approach. “The energy situation varies around the world. We want to stay in tune with customers…and provide diverse options,” it says.

However, Lexus will pursue an EV-only strategy, with plans for full electrification by 2035 (pushed back five years from a 2021 commitment(Opens in a new window) to do so by 2030). Lexus’s first fully electric vehicle is set to launch later this year, the 2023 RZ. It starts around $60,000.

The price point reflects the majority of other EVs on the market today, though there are several sub-$40,000 options. Toyota already offers one battery-electric vehicle, the Toyota bZ4X ($42,000), and has said it plans to launch five more EVs under the “bZ” badge (“beyond zero”), TechCrunch reports(Opens in a new window).

The Toyota bZ4X electric vehicle, available now.
(Credit: Toyota)

Although Toyota already offers an electric vehicle while Lexus does not, the higher price on Lexus vehicles makes the brand an easier choice for electrification given the high cost of battery materials, and the desire to compete with the likes of Tesla, which prioritizes costly software and self-driving features over the mass-market appeal on which Toyota prides itself.

Toyota says it is accelerating development of its new Arene(Opens in a new window) automotive software platform, led by CFO Kenta Kon. The platform will host new EV-related services, dealership collaborations, and mobile apps. Kon will also oversee activities at Woven City(Opens in a new window), a 175-acre prototype city at the base of Mt. Fuji, which Toyota says has higher priority than ever. Woven will serve as a playground for testing autonomous driving, hydrogen fuel, and a full-scale model of a newly designed city.

Rendering of Woven City.
(Credit: Toyota)

“A swarm of different technologies are beginning to radically change how we inhabit and navigate our cities,” says(Opens in a new window) Bjarke Ingels, the city’s Danish founder and creative director. “Connected, autonomous, emission-free and shared mobility solutions are bound to unleash a world of opportunities for new forms of urban life. We believe we have a unique opportunity to explore new forms of urbanity with the Woven City that could pave new paths for other cities to explore.”

As much as Toyota is working to imagine a new future, it’s made a point to honor the company’s tradition. “Our new team’s theme is ‘inheritance and evolution,'” reads this week’s Lexus EV announcement. “We will implement product-centered and region-centered management while valuing the philosophy of our company’s founding.”

Just one day after Toyota unveiled its new EV focus with Lexus, Shoichiro Toyoda, who led the company as CEO from 1981 to 1992, died(Opens in a new window) at age 97. Toyoda, father of current CEO Akio Toyoda, was known for expanding into North America and rolling out the Lexus brand, Automotive News reports(Opens in a new window). As one generation passes, it’s a new chapter for Toyota that seems to honor his legacy with the newfound focus on Lexus.

But for most car buyers, the question is how will Toyota bring electric vehicles to the lower-priced, well-loved selection it’s famously produced in greater quantities than any other automaker.