Lexus HS 250h Pricing—Will It Be Low Enough?

May 29, 2009

A couple of weeks ago as we got our first drive of the upcoming 2010 Lexus HS 250h—and a first up-close look at its many tech-savvy features—Lexus officials were still guarded about pricing.

It makes sense that even just before launch the company is cautious about pricing for this accessible hybrid that, by some accounts, could be called an entry luxury model. The brand has already adjusted its estimated sales figures; at the HS 250h’s debut in Detroit, Lexus General Manager Mark Templin said that the brand hoped to sell 30,000 of the luxury hybrids annually, but by the time of the media preview TheCarConnection.com attended the number he gave had been adjusted to 25,000.

I knew going into the preview that many in the media and auto industry are anticipating the HS’s starting price, when it goes on sale later this summer, to be just on the high side of $35,000, but is that too high? Some other sources on the Web are wishfully estimating upper twenties, but it’s highly unlikely to be quite that low given the extra engineering that went into the HS 250h. When a company representative asked what I think the HS should start at and I responded $33k—which I thought seems reasonable—it was followed by an eerie silence as if I’d just given a too-distant number on The Price Is Right.

2010 Lexus HS 250h

2010 Lexus HS 250h

Given the standard spec of the HS, and an extensive options list that will likely bring the bottom-line price of a loaded HS 250h up to $45k or higher, it doesn’t make sense to price the base HS that much higher than a fully loaded Prius. The Prius starts at $22,750 for the base Prius II, while the top-trim Prius V loaded with the Advanced Technology Package and the Navigation System comes in at $32,520, with destination. That includes lots of extras, like smart cruise control, a Pre-Collision System, Lane Keep Assist, a backup camera, and a voice-activated nav system with XM NavTraffic, that are all optional on the HS. And oddly, the intelligent parking assist system and cool Solar Roof Package both offered in the Prius aren’t available in the HS.

Admittedly, there’s the Lexus dealership experience, and that’s worth a lot on its own. The HS 250h also has more power and slightly better drivability, a slightly sportier feel, better isolation from road noise, and a heftier feel going down the road (it’s a lot heavier), plus a very nicely appointed interior. But HS’s interior is also more cramped than that of the Prius, and its fuel economy is significantly lower, for those that do mind the difference between 35 mpg city and 51 mpg city.

Firstly, I don’t see why the bigger-budgeted, comfort-oriented segment of Prius shoppers wouldn’t cross-shop the HS. When a friend bought his Prius Touring quite recently, the dealer told him that he was getting the “Lexus of Priuses.” Well, that’s sort of the HS now, right?

What else would people consider with the HS 250h? The Camry Hybrid is another logical rival—a roomy hybrid sedan, albeit one without as much luxury, that sells for less than $27k base and about $31k with extras like leather heated seats, a nav system, and upgraded audio. It doesn’t include the Lexus name, the plush interior, or some of those tech features but—surprise—it actually accelerates faster than the HS, and has great back-seat room. At the top end of the comparison, shoppers might also compare a base Lexus RX 450h starting at about $42k, with a fully loaded HS 250h at the dealership. For those set on a sedan, I can see green shoppers also looking at the more affordable clean diesels like the VW Jetta TDI or, at the top-lux end, the new BMW 335d. And then of course there's the much acclaimed Ford Fusion Hybrid, which is less luxurious but cheaper, more fuel-efficient, roomier and, by more accounts, more fun to drive.

2010 Lexus HS 250h

2010 Lexus HS 250h

2010 Lexus HS 250h

2010 Lexus HS 250h

The Prius comparisons are inevitable, and as such the HS 250h’s standard feature set is a little less techy than you might think and more luxury, security, and image-oriented instead. That includes LED brake and taillights, water-repellent front door glass, SmartAccess keyless entry, Bluetooth calling features, power seats, dual-zone automatic climate control, steering-wheel audio controls, footwell illumination, a garage door opener, and a ten-speaker sound system with CD changer, MP3, aux input, and Bluetooth audio streaming. Then there’s safety: The little HS 250h will come with TEN (not seven) airbags, including seat-mounted side airbags for all four outboard passengers, side-curtain bags that cover front and back, and knee airbags for both front occupants. Front-seat occupants also get active headrests. Electronic stability control and anti-lock brakes with Brake Assist are also included, and then there’s a one-year subscription to the suite of Safety Connect features, covered in our post yesterday.

The options list is lumped into several large packages but includes a Premium model with leather ventilated seats, memory side mirrors with reverse tiltdown, wood trim, and larger 18-inch alloys. The navigation system is grouped with a backup camera, the Remote Touch controller, the Enform suite of infotainment services (see earlier post), and NAV Bluetooth, which will download addresses from a personal device. Adaptive Front-lighting (AFS) and Intelligent High-Beam, and upgraded 330-watt Mark Levinson sound with DVD audio/video, are other items definitely not offered on the Prius.

It comes down to priorities. If the tech gizmos and fuel-efficiency are what matter most, and you’re on a budget, the 2010 Toyota Prius will probably make you happiest, but if you want more of a true luxury feel, a more confident feel on the road, and the Lexus badge, go for that HS 250h.

How should the HS 250h be priced? Is $35k too high, or is it worth the price of entry for the Lexus brand? And is the HS too compromised as both a hybrid and as a luxury car, or does it strike just the right balance for affluent Prius owners who could have spent more? We're still mulling over the answers; let us know what you think!

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