Best small/medium SUV?

[Why Not?]

Response Part 1

You make some interesting points!

Some points/ facts to consider:

The ~$62,000 Cdn. Lexus 400h gives you a "4.0 litre" V8 performance [versus 3.3L V6 performance of the RX330]; similar to a BMW X5 (retails for over $70k to $80k with a similar package/ features).

I agree on the performance issue but, the RX330 already has pretty good performance. Good enough for most consumers. Is this alone a compelling reason for forking over an extra $12k for most consumers? I think not.

The Gap is not $12k as the 'packages' are different, the gap is more like $6k which is more than offset by the power increase (3.3L V6 230 H vs. 268 H {like a 4.0L V8}).

The gap is $12k. Go to the Lexus website. The gap for the base price is almost exactly $12,000. The fact that the RX400 may have option packages that are not available on the base RX330 is not relevant. The 330 is a Lexus and even the base car is a well equipped car. The fact is that you can get a well equipped 330 for $12,000 less than you can get into a base 400 for. And at $52,000 the 330 is already very expensive, more expensive than most people can afford. So the increment is something most people can’t justify.

But even if you were right, and the difference was only $6,000, you’d still have to drive over 190,000 km to save the money back. Not a good proposition.

In terms of Value proposition, it only gets better from here in terms of:

-better for the environment

-Better mileage compared (30 per cent less than a RX330 V6, but drives like a V8).

I agree that most people, when given the chance, will do something for the environment. But my experience has shown that when the price of something goes up by nearly 25% ($12,000 on $52,000) the number of people willing to do that drops dramatically. I’ve already covered the better mileage thing (it doesn’t pay back). Basically they are offering you the chance to save a dollar and it’s only going to cost you $2 to do it.

High quality, safe vehicle, good resale, made in Japan, et cetera

They are both made in Japan, by the same company, so this is irrelevant.

 

[Why Not?]

Response Part 2

In terms of your battery issue, get the 8 year-160K bumper to bumper warranty. Today the cost is about $6K to replace all of the batteries, but in 8 years it will be much less {similar concept to DVD player prices $1500 going down to under $100 over a period of time}.

Even extended bumper to bumper warranties do not offer the extended coverage on normal wear and tear items (i.e. tires). Do you know if such a warranty even exists for a Lexus, and if it does, does it cover the battery replacement? I very much doubt it. Such warranties are also not cheap. So you have just added more to the price difference.

How much less will the batteries be in future? And how long will they last? 100k? 150k? This is an unknown and has not been factored into the cost of ownership that we have worked on. Would you buy a conventional gas powered vehicle if the engine had to be replaced every 100k or 150k? This is not an unreasonable guess. The technology is unproven at this size scale but Nimh and LiH batteries are already used in cell phones and cameras. Based on their life there I wouldn’t want to guarantee it will last the service life of a car. If this is true guess what that will do to the resale value of such a car with more than 100k on it?

Toyota has one of the best recycling programs in the world. There is a reason why Toyota has top notch vehicles; they are a market leader of quality and innovation, which is evidenced by their share price.

Come on! Other than government mandated recycling plans for stuff like engine oil and tires what does a Toyota dealership do with used parts? If they can’t be remanufactured they throw them in the garbage like everyone else in North America does. And when a vehicle is scrapped there is also no mandated “recycling by the manufacturer” here in NA. It is the responsibility of the car’s owner. So Toyota doesn’t really have any recycling plan at all. You can bet there is going to be some sort of a government rule coming soon about these batteries. And when it does the consumer is going to get hit with a “recycling fee” when he changes the battery, just like we have had to do in the past with oil and tire changes.

Simple economics of realistic/ valid numbers and overall value proposition...Go to a dealer and see/ test drive for yourself!

I don’t know where you took economics. I believe that when the true cost of ownership of these things becomes apparent the vast majority of people will not choose them. They will probably be here for a long time, but as niche vehicles which garner a very small slice of the market. That is because they are good PR and can make everyone feel all green, fuzzy and warm inside.

This will, of course, change if they can get the price difference way down, or gas goes way up, so that payback can come within a few years. But right now they are just not a good deal based on cost savings or the risk of unproven long term reliability of the technology.