Jukebox Jargon: Your Automotive Digest
High-End Electric Vehicles Reporting Poor Performance: Understanding the Reasons Behind Their Struggles
Let's dive into the world of luxury electric SUVs, a realm where costs are steep and sales... well, they could use a boost.
First off, we've got the Mercedes G-Class SUV, despite featuring underwater wading capabilities, off-road crawl assistance, and 360-degree swiveling prowess, the deal's seemingly been a no-go for many buyers. And it's not just Mercedes facing the electric flop syndrome. Ferrari, Porsche, and Audi have all experienced their fair share of struggles with electric models too.
Porsche, for example, has dialed back its electric vehicle plans amid soft sales of its Macan SUV and Taycan models. The depreciation on the Taycan is so jaw-dropping that some Porsche dealers reportedly refuse to accept their own brand's electric vehicles from customers looking to offload or upgrade. Ouch!
Ferrari, on the other hand, has pushed back the launch of its second EV model until at least 2028 due to weak demand. Audi's Q8 E-tron has been discontinued following the closure of its Belgian factory, with Audi blaming a global decline in orders for electric luxury vehicles as the reason.
So, what gives? "It's not just about shoving a battery in a vehicle; large premium EVs require monstrous battery packs to match the performance of typical ICE vehicles, causing prices to skyrocket," explains Peter Wells, a business professor from Cardiff University in Wales, UK. The all-electric G-Wagen will set you back a whopping $162,000!
With the incoming luxury electric Range Rover expected to retail for over $180,000, it looks like the days of premium prices for aging designs are coming to an end, according to Wells. Mercedes, unfortunately, might not find salvation in the US market either, as potential tariffs of up to 50% on imported cars could make the high-priced G-Wagen even less competitive.
Handelsblatt, a German newspaper, recently revealed that Mercedes' G-Class SUV sales have been disappointing, with only 1,450 G580 units sold in Europe through to April 2023. This figure pales in comparison to the 9,700 sales of its combustion-engine counterparts during the same period.
Despite Mercedes' PR department maintaining that they're prepared to cater to every market scenario, an unnamed company insider has called the G580 a "complete flop" since its launch last year. A spokesperson from the company simply states, "We offer our customers vehicles with both fully electric drivetrains or electrified high-tech combustion engines. Our customers decide what suits them best."
Extras - Enrichment Insights
- High Prices and Battery Costs: Luxury electric SUVs suffer from expensive battery packs necessary to offer acceptable range and performance, resulting in high price tags that create a significant barrier for buyers (Source).
- Weak Demand and Market Challenges: Despite the overall EV market growth, luxury electric SUVs face weak demand, as seen in Mercedes' G-Class selling only 1,450 units compared to nearly 10,000 combustion-engine counterparts in the same period. Various factors, such as competitive plug-in hybrids and shifting economic and regulatory situations, may affect demand (Source & Source).
- Economic and Regulatory Factors: In the US, potential tariffs on imported cars from Europe could escalate prices even further, reducing the competitiveness of imported luxury EVs (Source & Source).
- Internal Industry Challenges: For brands like Audi and Porsche under Volkswagen Group, technology development delays and leadership shakeups have impacted the competitiveness of their EV lineup (Source).
- The shifting landscape of the automotive industry is evident, as insiders reveal various challenges faced by companies in producing luxury electric SUVs, such as the Mercedes G-Class.
- Despite innovative features like underwater wading capabilities and 360-degree swiveling prowess, sales of the Mercedes G-Class have been disappointing, with only 1,450 units sold in Europe.
- The high prices of luxury electric SUVs, due to monstrous battery packs necessary for acceptable range and performance, create a significant barrier for buyers, as stated by business professor Peter Wells.
- Some insiders suggest that the inflated prices and weak demand for luxury electric SUVs could change the landscape of premium pricing for aging designs.
- Audi, in response to weak demand and a global decline in orders for electric luxury vehicles, has discontinued its Q8 E-tron model following the closure of its Belgian factory.
- Newsletters on technology and finance could provide valuable insights, as they detail economic and regulatory factors in the US that could impact the competitiveness of imported luxury EVs, such as potential tariffs on imported cars from Europe.
- Porsche has faced struggles with electric models, such as the Macan SUV and Taycan, leading to a dialing back of its electric vehicle plans. async:true, freeze: true }
