Jaguar has done great things lately.  The sexy F-Type is the best-looking coupe of its caliber you can buy for under $70,000; the XF is a welcome fresh face among a sea of interchangeably good and mostly boring sedans. The F-Pace SUV, with its cool-cat good looks, novelty, and relative affordability, will probably capture conquest buyers from Cadillac, Lexus, and Infiniti.  Unfortunately, the new 2017 XE doesn’t push the company nearly as far forward as those do. Instead, if you compare the $34,900 sedan against such class leaders as the BMW 3-Series, Audi A4, and Mercedes C Class, it feels inferior. This isn’t a step backward for Jag per se—it struggled far more under Ford Motor Co. ownership until Tata bought it in 2008—but in the ultra-competitive luxury sedan segment, the XE feels behind schedule.  The new XE is certainly better than its predecessor. How could it not be? This was Jaguar's first smallish sport sedan in nearly a decade, following Jag's introduction of the X-Type line in 2009. The $57,545 XE 35t R-Sport that I drove comes with a 3.0-liter V6 engine supercharged to 340 horsepower and 332 pound-feet of torque.  A 240hp, rear-wheel-drive model and an 180hp diesel version in RWD or AWD are also available, but if you’re getting the Jag, stick with the R-Sport. Base price on this version is $51,700, and upgrades add more. The very base model of the XE, the XE 25T, has a 2.0-liter turbocharged four-cylinder engine and starts at $34,900.  That’s plenty of power—more than in the 340i xDrive ($47,800). It’s also, I should say, less power than offered by the cheaper C450 AMG ($50,800), which at 4.8 seconds is also much faster to reach 60 miles per hour. The XE has a loose lack of urgency you don’t feel in either of them.  Zero to 60mph in the XE takes 5.1 seconds; top speed is 120mph. Once you get really going, you’ll feel fine: The XE performs capably and supplely, like a well-fed tomcat making neighborhood rounds. The eight-speed automatic transmission with paddle shifting is appropriately smooth and light; I barely noticed its presence last week driving out to Rockaway Beach. I did notice, though, that the brakes suffer some disappointing fading if you punch them hard.  Jaguar has updated the electronic power steering, with intelligent stop-start (which I promptly deactivated on account of its annoying nature) and torque vectoring, which we are seeing with such prevalence and success in this segment that I predict it’ll be de rigueur in all sedans within a few years. The improvements are necessary and good, though not enough to make this car as even-keeled, responsive on straightaways, or nuanced around corners as the competitors from Audi, BMW, and Mercedes. (Are you catching a pattern here? Yes, those three are better; and yes, I keep bringing them up. Jaguar should be eyeing them above all as it continues to improve product. Consider it an automotive #Squadgoal.)  The bottom line is that you will find the XE more than capable; as a stand-alone sedan, it certainly deserves to be in the premium class. On paper, the numbers are competitive, with performance superior to what we find at lower pricing levels. I don't even have a beef with the rotary-dial controller that switches you into park, neutral,and drive, though others have criticized it as retrograde. But there is a gap in real-time performance—and interiors—between the XE and the front of the pack.  On the outside, Jaguar has sculpted this sedan well enough to elicit surprise from casual observers. One friend in Queens (an Audi man, mostly) voiced his unexpected pleasure at its svelte body and athletically wide (for a sedan) stance. I tend to agree. The XE is distinctive looking, even slightly more dynamic across the body than Audi’s updated A4. The diamond-lattice front grille is offset nicely with the red scowl of the Jaguar logo; the red caps on the 19-inch rims carry the red idea down through the sides and rear of the car.  If you should glance at the XE from the rear, I doubt you will be able to identify it as a Jaguar unless you see the badge. Then again, given a blind, badge-less test of most of cars in this segment, few would find it easy to differentiate one brand from another. Still, the quad tailpipes and curled trunk lip look good. Jaguar has done a thoughtful job here, and it shows.  Standard packaging on XE R-Sport brings keyless entry, blind-spot monitoring, adaptive headlamps, “sport” badging, and parking aids, among other technology. The model I drove also came with Rhodium silver metallic paint ($550) and 20-inch propeller 10-spoke wheels ($1,000), which are welcome additions to make the car look more your own. Add those, choose a darker color for the exterior paint, and you’ve got yourself a handsome, if a little reticent, compact luxury car.  Life inside the XE, unfortunately, brings some confusion. Each door is split into virtually three levels—one that controls windows, one that controls locks, and a top ledge thing that is the most convenient to grab when closing the door after you. It’s unclear why the three functions weren’t grouped together in one minimalistic handle, as in most other cars.  The door is unnecessarily complex.  Elsewhere, I expect you might find the 10-way “sport” seats a notch more comfortable than the chairs in your average dental waiting room, but not much more than that. Remind me (again) why we need sport seats in a sedan? The backs are flat—and harder than we should expect nowadays in this segment.  You may also find the 10.2-inch touchscreen ($2,700, part of the Technology Package) frustrating in its responsiveness, or rather, lack thereof. The graphics and resolution should be better, and so should the plastic that encases it, but that wasn’t the main problem I had with them.  Nope, the real issue with the entertainment system is that at one point, after we tramped back in off the sand and engaged the car, the radio/Bluetooth/audio system didn’t make a peep. The graphics were engaged—the system showed that it was on; we tried Bluetooth, mute, un-mute, and so forth—but it had no sound. This happened once before in a Land Rover. (This is from Jaguar Land Rover Ltd., which hints at a broader problem.) Even though a full stop, turn-off, door open-and-close restarted the system with full sound, it was not a good thing to experience.  All angles of the interior.  If you are concerned with space, though, the XE has plenty of it. The wheels are set wider across than in the 3-Series, for instance; the rear fold-through seat and trunk offer more than enough room to make this viable as a do-all, carry-all driver. The moonroof comes standard; the electric rear sun blind does not.  Does this sound like a negative review? Well ... I didn’t hate the car. The Jaguar XE is a solid premium sedan priced fairly for what it offers; if you buy one, you should feel very proud to drive it. But does this mean the XE is on par with Audi, BMW, and Mercedes? Definitely not.  That just leaves it plenty of room to grow.
For a car whose sibling models are setting industry standards—such as the sexy F-Pace SUV and the growly F-Type coupe—the XE is a disappointment. Here's why.