Luxury cars continue to become less accessible in the U.S. market. There are many reasons for this, some of which include more expensive development and distribution costs, driving up pricing for new cars across the board. Brands have also identified that luxury products yield higher profit margins, resulting in them adopting much higher MSRPs compared to their production costs.
Many new-car buyers are demanding luxury, resulting in conventional mass market brands investing more time and resources into making formerly mundane sedan and SUV offerings that feel more special and upmarket. For 2027, there’s one Japanese SUV that’s benefiting from a comprehensive remodel that focuses more on being luxurious, without having an expensive price tag attached to it.
UPDATE: 2026/06/11
This article has been updated to include information about this model’s luxury-level features and comparisons with its luxury counterpart.
Why Luxury SUVs Now Cost $70K+
Toyota
The luxury car market in the United States currently reflects a high-stakes transition toward electrification and software-defined luxury, with traditional heavyweights and new entrants competing for dominance. As of March 2026, BMW, Lexus, and Mercedes-Benz continue to lead the sales charts, with BMW maintaining a slim edge in total volume while Lexus sees strong growth through its hybrid-heavy lineup. The most popular models today are almost exclusively luxury crossovers and SUVs, specifically the Tesla Model Y, Lexus RX, and BMW X5, which have largely displaced the mid-sized sedans that once defined the segment.
Over the last 20 years, the market has evolved from a hierarchy based on mechanical prestige and displacement to one defined by digital ecosystems, driver-assistance technology, and sustainable powertrains. The early 2000s were characterized by the likes of BMW, Mercedes, and Audi, and the rise of Japanese luxury through high-reliability offerings. This contemporary landscape has now shifted toward silent and high-torque electric motors and expansive digital interfaces. Brands like Tesla and Cadillac are using this strategy to reclaim significant market share by leaning into bold styling and cutting-edge software integration.
Toyota Has Been Quietly Moving Its SUVs Upmarket
Two 2023 Toyota Highlander Hybrid SUVs placed beside each otherToyota
Over the last decade, Toyota has strategically elevated its SUV lineup to capture a more premium segment of the market by transitioning to a unified global architecture that prioritizes structural rigidity and refined driving dynamics. This foundational shift allowed engineers to lower the center of gravity and adopt more sophisticated suspension geometries, resulting in a high-quality drive feel that bridges the gap between mass-market utility and luxury-tier composure.
To complement these mechanical gains, the brand has aggressively overhauled its interior philosophy, replacing utilitarian plastics with soft-touch materials, brushed aluminum accents, and leather-wrapped touchpoints while standardizing advanced digital cockpits and larger high-definition infotainment displays. By integrating comprehensive suites of active safety technology and luxury-leaning features like panoramic sunroofs, multi-zone climate control, and ventilated seating, Toyota has repositioned its SUVs as sophisticated lifestyle vehicles that offer a level of refinement and technological depth previously reserved for dedicated prestige brands. And the Toyota Highlander is the next SUV to get the same treatment.
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The 2027 Highlander EV Turns Family Luxury Into A Value Play
Toyota
The 2027 Toyota Highlander undergoes a radical exterior transformation from the 2026 Toyota Highlander to match its new electric identity. This includes the adoption of the brand’s hammerhead front fascia characterized by a closed-off grille and slim, full-width LED lighting. The vehicle’s silhouette is notably sleeker and more planted than the 2026 model. Key dimensional changes include a roofline that sits nearly an inch lower, a width increased by over two inches, and an 8.0-inch wheelbase extension that pushes the wheels further toward the corners.
2027 Toyota Hghlander EV.Tom Murphy | TopSpeed
Aerodynamics are heavily prioritized through the introduction of semi-flush door handles and new wheel designs, ranging from 19-inch alloys with full aerodynamic caps on the XLE to massive 22-inch alloy wheels on the Premium and Limited trims. The 2027 color palette introduces sophisticated new shades like Everest, Spellbound, and Reservoir Blue, while also offering modern two-tone configurations such as Wind Chill Pearl or Heavy Metal paired with a contrasting Midnight Black roof.
Toyota Gives The Highlander EV A Cabin That Feels Lexus-Close
2027 Toyota Highlander electric three-row SUVTom Murphy | TopSpeed
The 2027 Toyota Highlander’s interior undergoes a significant shift toward the premium market by adopting a panoramic glass dash that merges a 12.3-inch driver display with a standard 14-inch infotainment touchscreen into a single digital interface. An 8.1-inch increase in wheelbase over the previous model provides a third row that accommodates full-sized adults, complemented by a new L-finesse motorized seating system for effortless one-touch access.
Toyota elevates material quality through an extensive use of SofTex upholstery and soft-touch surfaces across the dash and doors, while the center console is redesigned with synthetic-suede-lined dual wireless charging pads and a wider storage shelf. To further distinguish it from the 2026 model, the 2027 version introduces a 64-color ambient lighting system that integrates with safety alerts. It also features the largest glass panoramic roof that Toyota has ever fitted to a vehicle. Joining this is an enhanced acoustic glass applied throughout the cabin to ensure a more refined and quieter electric driving experience.
Taking a look at the all-new Lexus TZ, the 2027 Highlander EV’s corporate twin, you can see just how close the Highlander comes to the premium landscape. In terms of tech, sound deadening, and comfort, the two models are fairly evenly matched, though the Lexus TZ pulls ahead in terms of all-out refinement, whereas the Highlander is more luxury-lite, with an underlying focus on mainstream EV shoppers. That said, it wouldn’t be hard to mistake the Highlander for an upmarket EV, thanks to the sleek, minimalist cabin design — a design take also seen in the TZ, as well as the large screens and unmistakable modernity.
That upscale cabin tech would not mean as much without the safety hardware to match, and Toyota appears to be treating that as part of the premium experience.
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Toyota Safety System 4.0 Makes The Highlander EV Feel More Premium
2027 Toyota Highlander screenToyota
Like the new Lexus TZ, the 2027 Highlander gets the latest version of the brand’s safety system, Toyota Safety System 4.0, or TSS 4.0; the TZ gets Lexus’s own brand of the new safety suite, called Lexus Safety System+ 4.0 (LSS+ 4.0). This loaded system includes:
- Pre-collision system with pedestrian detection
- Full-speed range dynamic radar cruise control
- Lane departure alert with steering assist
- Auto high beams
- Lane tracing assist
- Road sight assist
- Proactive driving assist
Along with basically every active driver aid you could need, the ’27 Highlander also features a slew of buffs in the form of Toyota’s Star Safety System that, while not as prevalent as the active assist suite, aid in overall safety and driving quality. Features like enhanced vehicle stability control, traction control, and electronic brake-force distributor elevate the on-road composure, while standard front and rear parking assists and available panoramic view monitor and advanced park ensure convenience remains competitive with the best in the segment. Rear seat reminder and blind-spot monitor with rear cross-traffic alert are also welcome additions to the comprehensive safety package.
But the biggest family-friendly improvement may not be the safety tech at all — it is how much more usable space Toyota unlocked underneath it.
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The Longer Wheelbase Finally Fixes The Highlander’s Third Row
Toyota
The 2027 Toyota Highlander sees a dramatic increase in interior volume thanks to the adoption of an all-electric drivetrain. The most noteworthy improvement is an 8.1-inch wheelbase extension that brings the total measurement to 120.1 inches, effectively outstretching even the larger Grand Highlander. While the overall vehicle height is slightly lower by nearly an inch to improve aerodynamics, the electric platform’s flat floor allows for a third row that provides 1.5 inches of additional legroom and 1.0 inch of extra headroom compared to the 2026 model.
This shift effectively reclassifies the Highlander from a tight three-row model to a proper adult-carrying SUV, with cargo capacity also benefiting from the redesign. Space behind the third row increases from 16 to 18.5 cubic feet, while the maximum cargo volume with all seats folded expands to roughly 87.5 cubic feet. These dimensional gains mean that while the Highlander remains smaller than the Grand Highlander in total length, its interior packaging offers a superior wheelbase-to-cabin ratio that significantly narrows the gap in passenger comfort.
That extra room is only part of the EV transformation, because the Highlander’s powertrain lineup is changing just as dramatically.
The Highlander EV Drops Gas Engines For Two Electric Setups
Toyota
The 2027 Toyota Highlander evolves into a fully electric SUV, marking a radical departure from its predecessor by outright abandoning internal combustion engines. For the new model, you’re only going to have access to two variations of a standard battery-electric powertrain. The front-wheel-drive XLE trim serves as the entry point, featuring a single electric motor that produces 221 horsepower and 198 pound-feet of torque. If you are seeking more capability, the dual-motor electronic all-wheel-drive system increases total output to 338 combined horsepower and 323 pound-feet of torque.
Because these electric motors drive the axles directly, the conventional eight-speed automatic found in previous models has been replaced by a single-speed direct-drive transmission. This new mechanical layout also introduces vehicle-to-load technology, allowing the Highlander to act as a mobile power source, and includes a standard heat pump to maintain efficiency in colder climates.
But the real test of this new electric layout is whether Toyota can give families enough range and charging convenience to replace a gas-powered three-row SUV.
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Up To 320 Miles Of Range Makes The Highlander EV Family-Ready
2027 Toyota Highlander liftgate teaserToyota
The 2027 Toyota Highlander features two distinct battery capacity options, depending on your drivetrain choice, with the goal of meeting different family needs. The standard 77.0-kWh battery provides a manufacturer-estimated range of 287 miles in front-wheel-drive configurations, which drops to 270 miles when equipped with the dual-motor all-wheel-drive system. If you want to improve on this figure, you can upgrade to the larger 95.8-kWh battery, which is on the Limited and optional on the XLE all-wheel drive.
Base Trim Engine
Electric
Base Trim Transmission
Single-speed Automatic
Base Trim Drivetrain
Front-Wheel Drive
Base Trim Horsepower
221 hp
Base Trim Torque
198 lb-ft
Make
Toyota
Model
Highlander
Segment
Midsize SUV
Doing so boosts the estimated driving range to a more appropriate 320 miles. Charging convenience is significantly improved via a standard NACS port, granting direct access to the Tesla Supercharger network. When using a DC fast charger, both batteries will replenish from 10 percent to 80 percent in about 30 minutes under ideal conditions. For home charging, the integrated 11-kW onboard charger allows for a full replenishment in about seven hours for the smaller pack or nine hours for the larger one when connected to a 240-volt level two station.
That range figure makes the Highlander EV easier to take seriously, but the price is what could make it genuinely disruptive.
The Estimated $48K Price Is Where This Highlander Gets Dangerous
2027 Toyota Highlander electric three-row SUVTom Murphy | TopSpeed
Toyota is expected to introduce the all-new, all-electric 2027 Highlander to the American market early next year, with official production likely to commence at its Kentucky manufacturing hub by the end of this year. Toyota still needs to finalize official MSRP figures, but key industry analysts, including Edmunds and Car and Driver, estimate a starting price of approximately $48,000 for the entry-level XLE single motor trim, representing a premium over the current hybrid model to account for the new battery architecture.
This isn’t necessarily an affordable SUV, but when you look at what the brand includes as standard, it’s hard not to consider this competitively priced. Stepping up to the XLE all-wheel drive is projected to cost around $51,500, while the larger-battery Limited dual-motor trim is expected to command a price tag closer to $57,000. These estimates suggest Toyota is positioning the Highlander EV to remain competitive against three-row rivals like the $54,900 Kia EV9, while the existing Grand Highlander remains the primary option for those seeking a larger, gas-powered or hybrid alternative at a similar price point.
If Toyota can keep the final MSRP close to these estimates, the 2027 Highlander EV may become one of the clearest examples yet of luxury features moving into the mainstream.
The Resale Value Question Nobody Is Asking Yet
2027 Toyota Highlander EV.Tom Murphy | TopSpeed
The 2027 Highlander EV makes a compelling case on sticker price, but the total cost of ownership story gets more complicated when depreciation enters the equation. Toyota’s hybrid lineup has long been one of the strongest performers in the segment for retained value — the Highlander Hybrid and RAV4 Hybrid consistently rank among the best for resale in their respective classes. The 2027 Highlander EV will be asking buyers to assume that Toyota’s EV will inherit that same reputation, and the early evidence from Toyota’s own EV lineup suggests that’s not a safe assumption.
Toyota’s bZ4X has an expected five-year depreciation rate of roughly 58% from its original MSRP over. That figure is lousy by Toyota standards but roughly in line with where the broader EV market has been landing. The CarBuzz price trend tool shows that the 2023 Toyota bZ4X XLE AWD has depreciated from its MSRP of $44,080 to an average value of $22,675 today.
2023 Toyota bZ4X XLE AWD price trendCarBuzz
None of this means the Highlander EV is a bad buy, but buyers who have come to expect Toyota-level resale value retention should go in with realistic expectations. Toyota’s hybrids sit near the top of the industry for value retention; its EVs, at least so far, do not. Whether the Highlander EV bucks that trend remains to be seen, but it’s a question worth asking before signing.
Sources: Edmunds, Car and Driver, CarEdge
