Now more than seven years old, the Lexus CT has long since started showing its age. It’s been withdrawn from the US market, its place at the entry level of the company’s lineup effectively taken by the new UX crossover. But Lexus is reportedly preparing a replacement.

Auto Express reports that the next-generation CT will be offered both as a hybrid and as a pure EV. That’d put it in direct contention with the Tesla Model 3. And it would help distinguish it from other luxury hatchbacks like the Mercedes A-Class and Audi A3.

The new Lexus CT would start afresh, based on the same TNGA platform as the new Toyota Auris (known as the Corolla Hatchback in North America). But of course it would take a more premium approach than its Toyota counterpart – in addition to offering powertrains relying more heavily on electric propulsion.

With models like the CT hatchback and the HS sedan that came before, Lexus has had difficulty in the past selling dedicated hybrids – especially in the US. Its primary focus has revolved instead around hybridized versions of conventional models like the ES, GS, and LS sedans, the UX, NX, and RX crossovers, and the LC coupe. With the new CT, Toyota’s luxury brand would seek to turn that around.