People looking to spend tons of money on a car will soon have a more eco-friendly option, as a variety of luxury auto companies are developing electric vehicles. High-end automakers are taking different paths to market: Companies like Ferrari are all-in on EVs; others have a more muted approach. As the jostling continues, there are concerns that the luxury car market might be the wrong platform for EVs.
What luxury companies are making EVs?
Ferrari, Lamborghini, Mercedes-Benz and Porsche are all experimenting with EV development. Ferrari has been pushing ahead at a rapid pace. The company “doesn’t have an EV on the market yet, but its first model, called Luce, is expected to be open for orders later this spring,” said CNBC. Still, there are hurdles ahead for the iconic Italian brand.
For starters, electric cars can go extremely fast just like gas-powered Ferraris, but “much of what makes an internal combustion Ferrari compelling is missing,” Karl Brauer, an executive analyst for iSeeCars, said to CNBC. People purchase Ferraris for the “way it stirs a person’s senses: the look of it, the sound and feel of the engine and the smell of the exhaust.” Experts say many of these experiences may not exist in an electric Ferrari.
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Though Ferrari’s plans are in motion, the same cannot be said for Lamborghini, which has “pulled the plug on plans” for its EV in the “face of collapsing demand among its well-heeled customers,” said The Times. Instead, the company will debut a hybrid model. It admits this is a demand issue. The “acceptance curve” for EVs in Lamborghini’s market is “flattening and close to zero,” Lamborghini CEO Stephan Winkelmann said to the Times.
What does the market say?
Others in the auto industry have also noted the demand problem raised by Lamborghini executives. For “many years, many of the electric vehicles that Americans bought were luxury models, like the Tesla Model S, the GMC Hummer and the Porsche Taycan,” said The New York Times. All of these vehicles sell for more than $80,000, while Lamborghinis and Ferraris routinely sell for six figures (the Ferrari Luce EV is expected to cost at least $500,000).
Geopolitical factors, particularly tariffs implemented by President Donald Trump, are also being considered. Mercedes-Benz “had been selling electric versions of its luxury sedans and SUVs in the United States but recently said it would stop importing them,” said the Times. Volkswagen has similarly “slowed production of the ID.Buzz, an upscale electric van that’s made in Germany.” Many automakers have seen the “largest losses from luxury models. Now fewer sales will mean smaller losses.”
While luxury brands may be struggling with EVs, the “picture is very different for worldwide EV sales for brands not on the high-end,” said Wired, as this vehicle market is booming. It could also be that luxury buyers simply don’t want electric cars. For “luxury brands, which operate lower volumes and higher R&D costs,” said Philip Nothard, Cox Automotive’s insight director, to Wired, the industry’s challenges are “even more pronounced.”
