Why Lexus Cars Are More Expensive Than Toyotas

Lexus is one of the premier luxury car brands in today’s auto market, with its vehicles competing with the likes of longtime industry favorites like Mercedes-Benz, Land Rover, Audi, BMW, Cadillac, Lincoln and more.

However, many people still see Lexus vehicles as simply more expensive Toyotas. Toyota, after all, is Lexus’s parent company, new Lexus vehicles frequently launch alongside Toyotas. Furthermore, some Lexus vehicles are rebadged and up-styled Toyota vehicles like the 2023 Lexus LX, which has the same underpinnings as the Toyota Land Cruiser 300 Series.

Despite this perception, there are plenty of reasons why Lexus’s lineup commands a significantly higher price tag than Toyota’s, including Lexus’ bolder designs, higher-end innovative tech, and premium features.

Toyota Established Lexus As Its Luxury Brand

In the early 1980s, Japanese automakers like Toyota faced a daunting challenge — baby boomers, some of the most loyal Toyota customers, were trading in their affordable Toyotas that got them through their college days and early careers for premium European vehicles as they got older and landed higher-paying jobs. European car manufacturers like Mercedes-Benz, BMW, and Audi were becoming more popular in the luxury car segment in the United States alongside American staples like Chrysler and Cadillac. Toyota didn’t have a premium vehicle in its North American lineup to compete.

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To fill this gap, Toyota thought about reintroducing its Crown sedan to the American market — a luxury sedan that it pulled from the North American market in the 1970s. However, Toyota executives felt like it couldn’t compete with its main European competitors.

To solve this problem, Toyota Chairman Eiji Toyoda reportedly asked his engineers and designers in 1983: “Can we create a luxury car to challenge the very best?” Presumably, the team said yes as Toyota set out to create the perfect luxury vehicle. Toyota appointed engineer Ichiro Suzuki, who at the time had 25 years of experience developing Toyota vehicles, to lead the “Circle F” project.

Ichiro Suzuki and his team of 60 designers, 1,400 engineers, 2,300 technicians, and over 200 support workers eventually made the first ever Lexus vehicle — the special LS 400. Initial plans were to launch the car under the Toyota brand name. However, studies suggested that it would only succeed in the American market if the team launched it under a different brand.

Thus, the Lexus brand was born to elevate its luxury vehicles from the common and affordable Toyotas.

The LS 400 quickly outsold the popular full-size luxury Mercedes-Benz S-Class sedan — fulfilling Toyota’s original goal of dethroning established European luxury automakers in America. In 1990, just a year after Lexus launched the LS 400 in 1989, the Japanese sedan outsold its closest German competitor by around 17,000 units in North America according to data on CarSalesBase.

Lexus Creates Luxury Vehicles Comparable To European Luxury Car Brands

Lexus adhered to 4 key principles as they designed and created each of its vehicles from 1989’s Lexus LS 400 to the variety of Lexus cars today. These principles helped it defeat the long-running W126 S-Class in the early 1990s and cement its position as a luxury automaker globally even though its vehicles have a significantly higher price than Toyota’s vehicles.

One is Omotenashi which embodies the Japanese spirit of hospitality — a big factor in the popularization of Japanese vehicles in the US. Its teams designed each vehicle to anticipate and fulfill the needs and wants of Lexus’s premium clients. The Japanese automaker says that it wants to ensure that its vehicles deliver an amazing experience through thoughtful design and innovative technology.

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Another principle is Imaginative Technology — customer-centric tech that Lexus intends to be the most advanced in the premium car segment. This is why many Lexus vehicles have tech and features that aren’t found on cheaper Toyotas.

For example, Lexus Safety System 3.0 has a few more features on top of the ones available on Toyota Safety Sense 3.0. like a risk avoidance emergency steer assist system, front-to-front oncoming car detection, left turn intersection support capability, and a right or left turn oncoming pedestrian detection and braking system.

Lexus’s vehicles also adhere to the principle of Takumi Craftsmanship. In Japan, Takumi denotes a master craftsman who has over 60,000 hours of experience in honing their specialization. Thus, Lexus’s team ensures that each vehicle that leaves its factory is “nothing less than perfect” according to the manufacturer.

Lastly, Brave Design ensures each Lexus vehicle has a bold and eye-catching appearance on the road. It reflects Lexus’s iconic and unique styling that differentiates the Japanese luxury brand from other luxury automakers through ideas taken from nature, Japanese ways of thinking, and human experience. Even Lexus cars that retained the Toyota badge featured the luxury brand’s unique styling, like the Toyota Altezza which was also the Lexus IS in some markets.

All of these combined create Lexus vehicles that are significantly more luxurious than Toyota’s, with a significantly more expensive price tag to match.

Lexus Cars Have Toyota’s Reliability In A Premium Package

Some of Lexus’s vehicles are basically significantly more luxurious and comfortable than Toyotas while others are uniquely Lexus vehicles. For example, in comparison to the 2024 Toyota Land Cruiser, its 2024 Lexus GX sibling is far more luxurious.

2024 Toyota Land Cruiser and 2024 Lexus GX Standard In-Car Feature Comparison

The Lexus GX also has much more luxurious options including a 21-speaker Mark Levinson surround sound audio system, traffic jam assist system, adaptive variable suspension system, massage seats, and second-row captain seats which are seemingly all not available on any Land Cruiser trim level.

Some industry experts and HotCars expect the new Lexus GX to start at around $65,000, while Toyota stated the base 2024 Land Cruiser will start in the mid-$50,000s.

This price premium also applies to other Lexus models that are basically luxury versions of Toyota vehicles like the Lexus TX, which is the Toyota Grand Highlander’s sibling. It would be wrong to think, however, that Lexus vehicles are just rebadged Toyotas. Lexus’s vehicles are in a league of their own, featuring unique bold styling, innovative tech, and a luxury feel.

But it is also for this reason that many Lexus vehicles have Toyota’s world-renowned reliability. Lexus’s vehicles go through similar levels of engineering and quality as Toyota vehicles, as the luxury car brand adheres to its aforementioned Takumi Craftsmanship principle. Lexus even beat Toyota to become the world’s most reliable car brand in 2022 — Toyota was a close second though.

Lexus Has A Variety Of Luxurious High-Performance Cars

Beyond rebadged Toyotas, Lexus also has a number of unique models that aren’t in Toyota’s lineup. The luxury Japanese automaker’s first vehicle, after all, was the LS 400 which is a model that Lexus’s team designed and built from scratch. Some modern uniquely Lexus cars include the 2023 Lexus LS, and the 2023 Lexus ES.

But the pinnacle of Lexus’s lineup is its luxurious high-performance vehicles.

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Toyota’s only true high-performance vehicles are the GR 86 and the Supra, the GR Corolla is an upgraded version of a series production car. The GR Yaris in Europe, is a special edition rally homologation special. Lexus, on the other hand, has the RC F, LC, and IS 500 F.

Lexus made these vehicles to capture luxury-oriented buyers who wanted a premium car that excels both on city streets and on the track. The 2023 Lexus LC, for example, has a gorgeous interior combined with a naturally aspirated V8 engine that produces 471 hp and gives the car a 0 to 60 time of 4.4 seconds.

It also created legendary sports cars like the LFA, which the luxury automaker intended to be the ultimate supercar. The over-engineered Lexus LFA featured a naturally aspirated V10 that produced 563 hp and was full of F1-derived tech. The legendary V10 Lexus sports car even sells for more than a Bugatti Veyron today, which is needless to say significantly more expensive than any car Toyota has ever made.