Lexus ‘humbly’ looks to Tesla to compete in the EV era
With new global boss Takashi Watanabe at the helm, Lexus is finally venturing into the modern age of fully electric vehicles. To pick up the pace, Watanabe said Lexus will “humbly look at and learn from” Tesla’s accomplishments.
Watanabe took over as president of Lexus in April after former brand boss Koji Sato succeeded longtime Toyota CEO Akio Toyoda.
The new leader says fully electric vehicles will open up new possibilities for Lexus to expand the brand.
“In 2026, we will introduce the next-generation battery EV that re-innovates the vehicle modular structure, significantly alters our production methods and completely re-imagines the software platform,” Watanabe stated (via Automotive News), adding, “We have also prioritized vehicle design to embody the essence of Lexus.”
Lexus aims to sell 1 million EVs annually by 2030 as it works toward an all-electric lineup by 2035. According to the brand’s boss, the luxury automaker will spearhead Toyota’s next-gen EV offensive.
Despite the enthusiasm, Toyota and Lexus combined sold a total of 24,466 electric vehicles last year. Compared to overall sales of over 9.5 million, EVs accounted for a mere 0.26% of the share.
With a little over 7,400 EV sales through the first seven months of 2023, they still represent less than 1% of combined Toyota and Lexus sales. In the US, Lexus has sold only 2,068 units of its first EV model, the RZ electric SUV.
Lexus to “look and learn” from Tesla’s EV success
To pick up the pace and close the widening gap with EV leaders like Tesla and BYD, Lexus’s parent company, Toyota, recently revealed multiple emerging technologies and production methods.
At a technical briefing in June, Toyota highlighted several new innovations it planned to introduce, including advanced EV batteries, design improvements to enhance efficiency, and manufacturing upgrades to streamline output.
Toyota is vowing its next-gen EV batteries, due out in 2026, will provide nearly 500 miles of (over 800 km) range with a 20% cost reduction compared to the bZ4X.
More recently, the Japanese automaker showed off its next-gen EV production line during a plant tour with Giga casting technology, a process Tesla introduced in 2020.
Lexus will piggyback off the new technology and processes to better compete as electric vehicle sales are only expected to continue rising.
“We need to make it easier to build and simplify as much as possible,” Watanabe said. He added that it’s “important to humbly look at and learn from” Tesla’s success.
Despite using Toyota’s tech, Lexus still needs to differentiate itself. “We need to be more unique — we need to define that,” the brand boss explained that Lexus will need to go beyond the product, including a software operating system.
Lexus will introduce a concept of its next-gen EV at the Japan Mobility Show, expected to roll out in 2026.
Electrek’s Take
As with Toyota, introducing this technology is better late than never. Industry leaders like Tesla have been improving efficiency in all areas.
By the time Toyota and Lexus’s next-gen EVs roll out in 2026, Tesla will already be on to the next step.
Advanced batteries, design improvements, and manufacturing upgrades will help Toyota (and Lexus) compete, but delaying it will only put it further behind the pack.
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EV sales kept up their momentum in December 2024, with incentives playing a big role, according to the latest Cox Automotive’s Kelley Blue Book report.
December’s strong EV sales saw an average transaction price (ATP) of $55,544, which helped push the industry-wide ATP higher, according to Kelley Blue Book. The December ATP for an EV was higher year-over-year by 0.8%, slightly below the industry average, and higher month-over-month by 1.1%. Tesla ATPs were higher year-over-year by 10.5%.
Incentives for EVs remained elevated in December, although they were slightly lower month-over-month at 14.3% of ATP, down from 14.7% in November.
EV incentives were higher by an impressive 41% year-over-year and have been above 12% of ATP for six consecutive months. Strong sales incentives, which averaged more than $6,700 per sale in 2024, were one reason EV sales surpassed 1.3 million units last year, according to Cox Automotive, a new record for volume and share.
(My colleague Jameson Dow reported yesterday, “In 2024, the world sold 3.5 million more EVs than it did in the previous year … This increase is larger than the 3.2 million increase in EV sales from the previous year – meaning that EV sales aren’t just up, but that the rate of growth is itself increasing.”)
Kelley Blue Book estimated that in December, approximately 84,000 vehicles – or 5.6% of total sales – transacted at prices higher than $80,000 – the highest volume ever. KBB lumps gas cars and EVs together into this luxury vehicle category, so this is where Tesla Cybertruck is slotted.
However, Tesla bundles sales figures of Cybertruck with Model S, Model X, and Tesla Semi(!) into a category it calls “other models,” so we don’t know for sure exactly how many Cybertrucks Tesla sold in Q4, much less in December. However, Electrek‘s Fred Lambert estimates between 9,000 and 12,000 Cybertrucks were sold in Q4, and that’s not a stellar sales figure.
What will January bring when it comes to EV ATPs? What about tax credits? Check back in a month and I’ll fill you in.
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Tesla is now claiming that Cybertruck was the ‘best-selling electric pickup in US’ last year despite not even reporting the number of deliveries.
There’s a lot of context needed here.
As we often highlighted, Tesla is sadly one of, if not the most, opaque automakers regarding sales reports.
Tesla doesn’t break down sales per model or even region.
For comparison, here’s Ford’s Q4 2024 sales report compared to Tesla’s:
You could argue that Tesla has fewer models than Ford, and that’s true, but Tesla’s report literally has two lines despite having six different models.
There’s no reason not to offer a complete breakdown like all other automakers other than trying to make it hard to verify the health of each vehicle program.
This has been the case with the Cybertruck. Tesla is bundling its Cybertruck deliveries with Model S, Model X, and Tesla Semi deliveries.
Despite this lack of disclosure, Tesla has been able to claim that the Cybertruck has become “the best-selling electric pickup truck” in the US in 2024:
It very well might be true. Ford disclosed 33,510 F-150 Lightning truck deliveries in the US in 2024 while most estimates are putting Cybertruck deliveries at around 40,000 units.
Those are global deliveries, but Tesla only delivered the Cybertruck in the US, Canada, and Mexico in 2024, and most of the deliveries are believed to be in the US.
However, there’s essential context needed here, as we highlighted in our recent ‘Tesla Cybertruck sales are disastrous‘ article.
First off, Tesla had a backlog of over 1 million reservations for the Cybertruck that it has been building since 2019. This led many to believe Tesla already had years of demand baked in for the truck and that production would be the constraint.
However, based on estimates, again, because Tesla refuses to disclose the data, Cybertruck deliveries were either flat or down in Q4 versus Q3 despite Tesla introducing cheaper versions of the vehicle and ramping up production.
Again, that’s after just about 40,000 deliveries.
Furthermore, with almost 11,000 deliveries in Q4 in the US, Ford more likely than not outsold Cybertruck with the F-150 Lightning in Q4.
Electrek’s Take
Tesla is in damage control here. There’s no doubt that it is having issues selling the Cybertruck.
Inventory is full of Cybertrucks and Tesla is now discounting them and offering free lifetime Supercharging.
Tesla is great at ramping up production, and it’s clear the Cybertruck is not production-constrained anymore. It is demand-constrained despite having over 1 million reservations.
Again, those reservations were made before Tesla unveiled the production version, which happened to have less range and cost significantly more.
The upcoming cheaper single motor version should help with demand, but I have serious doubts Tesla can ramp this program up to more than 100,000 units in the US.
As a reminder, Tesla installed a production capacity of 250,000 units annually and Musk said he could see Tesla selling 500,000 Cybertrucks per year.
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