China wants to take the future of supercars by storm. A new generation of start-ups challenging the supremacy of Porsche, Ferrari, Lamborghini, McLaren, and others in the field of luxury cars – sleek, powerful, and fast - is emerging in the fast-growing automotive market. So, should traditional European and American luxury supercar manufacturers be on the lookout?
In the last couple of years, we have seen the Chinese NextEV Nio, funded by tech giants Tencent and Baidu among others first winning a Formula E title, and then releasing its track car Nio EP9 that established the Nürburgring record for electric cars. Many more fresh names are emerging in this burgeoning market, such as the start-up TechRules with its GT96 and AT96 TREV (Turbine-Recharging Electric Vehicle).
The efforts put by the government to increase the production and ownership of electric vehicles are finally paying off. The two major expected consequences are, of course, the crucial reduction of greenhouse gasses and the improvement of China’s image in the eyes of the rest of the world. But the technological innovation deployed to achieve these goals has been an astounding achievement in itself.
And what a market this is. Only in the last year, China’s domestic share of electric vehicles (EV) sales surpassed 3%, way ahead of the rest of the world with over a million units, and it doesn’t seem to stop. China is aiming for 1 million EV sales in 2018, and the numbers look favourable. In April EV sales reached 84,000 units and 94,000 in May, both growing year over year.
China’s automotive market is still the biggest in the world, despite a “modest” 3% growth in 2017 if compared with the staggering growth standards set in previous years. It is also dictating the trends, with a huge SUV share of 42% in the passenger vehicles segment, above the global average of 34%. However, despite losing shares of the SUVs segment in favour of Chinese manufacturers, foreign firms are still dominating.
It might come as a surprise then that the New Energy Vehicles (NEV) sector is exactly the opposite. China has the lion share of its own market. So, what is going to happen to the supercar market? Is this trend going to reflect on the luxury segment too?
Undoubtedly, big brands are gradually adapting to the new trends and society’s requirement for greener vehicles. Ferrari, McLaren and Porsche’s last generation of hypercars, new models delivering even more extreme performances, all featured the hybrid technology, even though applied in very different ways.
Luckily these historic brands are not spooked by the competition and rightly so. Surely not more than by the risk of losing their identity. As Lamborghini’s CEO Stefano Domenicali said in an interview it would be impossible for the company to suddenly shift toward pure electric technology. Such change requires time and the right technology, in order for them to remain faithful to the brand’s values. Customers do not buy Lamborghini (or other luxury supercars) just for the image, but mainly for each car’s specific driving experience, made of excitement, vehicle behaviour and engine sound. Against all odds, they recently showed their potential and vision of the future with the fully electric Terzo Millennio, like Porsche is doing with its Mission E. The customer and fan base though would most likely refuse to accept the abandonment of these brands’ roaring legacy.
The same must be true also for the other big competitors, that still follow the laws of the market and sales in the dominating trend of SUVs diffusion. While Porsche has by now a long-established presence in the segment, amidst many critiques by purists, Lamborghini unveiled a few months ago the Urus, its own very personal 650 horsepower idea of a sport utility vehicle. Ferrari also will soon follow releasing its own SUV that should properly address this growing slice of the market while creating a new breed of cars that has already been defined as Super SUV.
In the meantime, in fact, established European supercar brands, still rely greatly on the US market that is the largest for this segment, but in China environmental policies’ restrictions have not affected significantly their sales. Porsche represents an exception with yet another success in 2017 thanks to a +10% sales in China that remains its biggest single market. More importantly, in the end, the import tariffs reduction announced by President Xi will positively affect mainly luxury brands that rely only on imports.
Going back to the NEVs popularity surge then, as of right now, it touches only the farthest segment from the luxury one. The 20 best-selling EVs in fact are all small and cheap cars that accommodate consumers thanks to the low prices and the ease of obtaining a license plate instead of long and expensive auctions or lotteries necessary in tier-one cities.
Finally, we will probably see more and more opting for a solid hybrid solution, closer to Porsche’s 918 idea. But it looks like for quite a few years more, the customer base that can actually afford one of these wonderful pieces of engineering will keep preferring the character and excitement of the roaring internal combustion engine over the silent but apparently soulless electric one. No need to hurry then!
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