Commentary: Xiaomi made a cheap Ferrari EV. Who needs luxury carmakers?

HOW MUCH CONSUMERS ARE WILLING TO FORK OUT

Consumer perceptions are also changing. In China at least, luxury is increasingly about offering advanced software, voice recognition and artificial intelligence. However, customers aren’t necessarily willing to fork out a lot for these features.   

“An Apple Watch can do everything better: It can do a thousand more things; it’s a lot more precise; it can measure your heart rate. But nobody would pay US$200,000 for an Apple Watch,” Bugatti-Rimac CEO Mate Rimac said last year, explaining why sales of the more than US$2 million electric Nevera hypercar have been disappointing and why Bugatti’s new US$4.5 million hypercar, the Tourbillon, offers analogue instruments and a hybrid powertrain to retain exclusivity.

Although EV sales are booming in China, the very top segment of the market remains comparatively small, in part because consumers can get good quality tech and interior comforts at much lower price points. (Geely’s high-end EV brand Lotus has been forced to pivot to hybrids rather than remain in its small niche, while Nio has moved downmarket with its Firefly and Onvo sub-brands.) 

I’ve been impressed by some of BMW’s EVs, and it’s expected to build on that foundation with its upcoming Neue Klasse technology. But other Western manufacturers’ products often aren’t good enough considering how much they cost.

Mercedes-Benz is reportedly struggling to sell the US$160,000 electric version of its iconic G-Class SUV, the G580, due in part to the 3085-kg vehicle’s limited range and towing capacity; this has added to the German manufacturer’s lengthening roster of EV flops. Eye-watering depreciation of luxury EVs like the Porsche Taycan is also deterring customers.

No wonder Lamborghini doesn’t plan to launch its first EV until the end of the decade, while Ferrari is reportedly delaying its second EV until at least 2028 (the first will go on sale next year after a protracted launch).