Watching the launch of the last week of Xiaomi Corp’s luxury electric sport utility vehicle, The U7, shaken two strong emotions: wonder over its impressive technique, and deep predies for the future of Western vehicle manufacturers.

YU7 is the complete package-a stylish and tech-laden with 835 km (519 mi) driving range with SUVs, all for a cheaper price. The entry-level version costs only RMB 253,500 ($ 35,400).

Xiaomi design scores a few points for originality – Yu7 looks like a cross between one Ferrari Purosungu and a McLaren, while its first model, is a striking equality for Sporty Su7 sedan, Porsche Taycan. Nevertheless, these are amazing achievements for a smartphone company, which entered the automotive industry four years ago. I was at least surprised that Yu7 received around 300,000 orders within an hour.
While Yu7 competes with Tesla Inc.’s model Y directly China And now not available in the US or Europe, the price of more higher stickers with Western premium and luxury vehicle manufacturers should brainstorm EVS China.

Once growing combustion engines that make their brands disappear, how will they compete? Investors seem confident that Ferrari will maintain his cash. Indeed, it is lucky that China has less than 10% of the global sales of pring horses, as the V12 Purosangue starts at approximately $ 430,000 and once customized costs somewhere.

Porsche and other German’s premium vehicle manufacturers do not appear as flexible. A fake V8 engine in the form of Mercedes-Benz Group offers the noise on the electric hypercar concept that was teased last week, it would not be enough.

Electrification, automatic driving and digital connectivity wheels are replacing autos into cellphones. Hence Xiaomi and Huawei Technologies Co. Like consumer electrix companies are pushing in EV Marketand, which is offering a spontaneous digital ecosystem. Apple Ink failure to develop a car looks like an even more big lapse. The threat to luxury automakers is that their products become commoditized. Rapid acceleration, a main sales point of Western Sportscar brands, is now common in EVS: Xiaomi’s cars have achieved some blistering lap time in Nürburgring (industry benchmark). Meanwhile, China’s rapid innovation and product development cycles threatened to make manufacturers who could quickly appear old hats. Consumer assumptions are also changing. At least in China, luxury is growing rapidly about advanced software, voice recognition and offering artificial intelligence. However, customers are not necessarily prepared to do much for these features.

Met Rimac, Chief Executive Officer of Bugati-Rimac said, “An Apple Watch can do everything better: it can do a thousand more things; it is very accurate; it can measure your heart rate. But no one will pay $ 200,000 for Apple Watch.” Poetrain to maintain specificity.

Although EV sales are booming in China, the very top segment of the market is comparatively small, in part because consumers can get good quality technology and internal comfort at very low price points. (Gali’s high-end EV brand Lotus Technology Inc. is forced to pive for hybrids instead of staying in its small niche, while NIO Inc. has moved downmarkets with its firefly and Onvo sub-brand.

I am impressed by some BMW AG’s EVS, and it is expected to construct on that foundation with its upcoming Neau class technology. But the products of other Western manufacturers are often not enough given how much they spend. Mercedes-Benz Group AG is allegedly struggling to sell its prestigious G-Class SUV, G580 to sell $ 160,000 electric version of its prestigious G-Class SUV, G580; This has added a long roster of the German manufacturer’s EV flop. Luxury EV’s eye water depreciation is also stopping customers like Porsche Tycan.

No wonder Lamborghini has not planned to launch her first EV by the end of the decade, while Ferrari NV is allegedly delaying her second EV by at least 2028 (will go on sale next year after the first launched launch).

But there are risks in the legs-dragging: Imagine Xiaomi, Aito, MaExtro, byd CO. Will Yangwang and their ILK be able to be able to in five years?

Porsche CEO Oliver Bloom has stated that he does not consider Xiaomi a competitor and claims to have “very comfort” about his achievements on Racetrack. He said, “Customers who love sports, Porsche’s driving sticks to the dynamics brand,” he told analysts in March.

Nevertheless, the Stutgart-based automaker seems to have accepted its best days in China. Instead of cutting prices, it is closing around one third of its local dealers after comparatively expensive electric tiecan and Macans failed to sell well. And the Bloom is not completely leaving EVS to sell EVS in China.

For now, the US is essentially off-lymph for Chinese EVS due to import duties and combination of cyber security regulations. And while the European tariffs are not as high, Chinese luxury brands have only limited limited indos.

Consumer loyalty to long -established brands, slow pace of electrification, and difficulties to establish sales and service networks provide some protection to Western vehicle manufacturers. But in emerging markets – the Chinese vehicle manufacturers are now aggressively targeted – this is a different story.

Finally, the only way to continuously protect its premium pricing in the era of electric and software-defined vehicles for luxury vehicle manufacturers is to show that they can be more than the best than the China offering. It will be a very long order from what I saw last week.