The Toyota RAV4 Hybrid has set the bar for hybrid crossovers since it launched for model year 2016. Since then, the bestselling compact crossover in this most popular segment has fended off hybrid rivals such as the Honda CR-V, Ford Escape, Hyundai Tucson, and Kia Sportage. 

Unable to rest on its laurels, Toyota keeps improving on the RAV4 Hybrid. It launched with an EPA rating of 32 mpg combined with AWD. The 2023 Hybrid XSE AWD I tested for a week has a 40-mpg combined rating. 

Toyota finally updated the in-car technology to match its segment-leading hybrid powertrain technology this year, but is it enough to stay ahead of the hybrid crossover pack? Here’s what’s good about the 2023 Toyota RAV4 Hybrid XSE AWD, and where it could use some polish.   

Pro: Toyota RAV4 Hybrid wears SUV look

Nothing about the RAV4 Hybrid exterior suggests it’s a hybrid, except for the blue badging. With its square wheel arches, swole fenders, 18-inch black alloy wheels, vertical face, and stubby rear end, the current RAV4 looks like the product of a happy marriage between the Toyota 4Runner SUV and Tacoma mid-size pickup truck. Add on running boards ($620), mud flaps ($129), roof rack cross bars ($315), and other accessories, and the handsome XSE looks the off-road part embraced by more and more shoppers. 

Con: But the looks belie a subdued hybrid powertrain

The RAV4 Hybrid is quicker and more powerful than the base inline-4 engine but not as potent as the RAV4 Prime plug-in hybrid. It uses a 2.5-liter inline-4 paired with two motors, including one that drives the rear axle for standard all-wheel drive, while the front motor and engine run power through a continuously variable transmission. For more than two decades, Toyota has been refining its various hybrid systems, and the power transitions via the planetary gearset in the RAV4 remain remarkably smooth. Even though the RAV4 Hybrid can go from 0-60 mph in the mid-seven-second range, the RAV4 encourages drivers to go lighter on the throttle. At speeds up to about 15 mph or under the lightest throttle touch or while coasting, the RAV4 Hybrid runs on electric power. Hit the gas, leave the suburb, climb uphill, and the engine grumbles to life, disrupting that quiet cabin. It’s not that the RAV4 Hybrid is loud, but going from such quiet to such noise made me want to lay off. That’s a good thing in the ecological sense, and it’s easily overcome for the impatient senses. The RAV4 Hybrid has Eco and Sport modes to appeal to those senses, but I ended up using Sport only for on-ramps and other on-demand needs. 

Pro: Dynamic instrument cluster

My tester came with a $2,100 XSE Technology Package with a 12.3-inch digital instrument cluster. It ditches the puny iconography and limited sidebar of the past decade or more for three circular gauges showcasing an array of info. The steering wheel controls remain the same, but a long press of the OK button lets users toggle between a center display showing active driver-assist features or the vehicle speed, and a left gauge that showcases trip meters, eco scores, tire pressure, and other vehicle info. Some of that info can be shown in the right gauge, though it’s mostly for media and infotainment. It feels, dare I say, modern. For a price. 

Bonus kicker? The trip reset function comes with an actual button on the dash knee pad, instead of a tiny analog stalk sticking out of the display. Bold leap, Toyota.  

Con: RAV4 Hybrid is getting expensive

Equipped with the extras noted in this review, the 2023 RAV4 Hybrid XSE AWD I tested cost $43,151. With the price new car buyers are paying averaging $46,000, this might be more about all cars than the RAV4, which starts at about $32,000 for the base LE. The Limited tops the lineup at about $9,000 more. The Hyundai Tucson Hybrid AWD has nearly the same price delta, while the Honda CR-V Hybrid AWD starts at about $35,000 and also tops out at $41,000. 

Pro: 2023 Toyota RAV4 carves out smart storage spaces

The 2023 Toyota RAV4 straddles the digital and analog age in a welcoming way. The 10.5-inch touchscreen sticks out of the dash like an aftermarket add-on, but the functionality, smartphone connectivity, and voice commands work well. A dedicated climate panel has big dials and dedicated heated seat buttons that even mittens (not the cat) could operate. The bar near the driver’s left knee on the dash is less convenient, housing light, defrost, power tailgate, tripmeter, and other less frequently used functions, but it keeps the center stack from being too cluttered. 

Con: The rugged add-ons eat into fuel efficiency 

In my week around town, I averaged just under 38 mpg, according to the trip meter. That’s the EPA highway rating (41 mpg city, 38 highway, 40 combined), and about half my miles fluctuated in the 70-mph mile range. There was also rain. One 40-mile round-trip highway run at night clocked 31.8 mpg. My driving style had the biggest influence on efficiency, but the running boards and roof rack didn’t help. 

Pro: Hybrid XSE’s sharp interior

The Hybrid XSE comes with synthetic leather upholstery lined with blue accents to give it more character than other RAV4 models. 

Equipping the 2023 Toyota RAV4 Hybrid XSE with a $2,010 Technology Package and $580 for the larger touchscreen with JBL audio, would still keep the price just under $40,000. That’s a value. The hybrid crossover leader still packs a value with a lower cost of ownership over time, and the balance of new tech and easy-to-use controls, as well as a sharp look inside and out, uphold the RAV4’s popularity. 

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2023 Toyota RAV4 Hybrid XSE AWD

Base price: $37,220, including a $1,335 destination fee

Price as tested: $43,151

Drivetrain: 219-hp 2.5-liter inline-4 and motor powered by a 1.6-kwh battery with an eCVT and all-wheel drive

EPA fuel economy: 41/38/40 mpg

The hits: Sharp looks inside and out, good storage space, digital instrument cluster

The misses: Real-world mpg trails EPA, subdued powertrain