ONLY ONE WAY TO DEFEND PREMIUM PRICING But there are risks in feet-dragging: Imagine what Xiaomi, Aito, Maextro, BYD’s Yangwang and their ilk will be capable of in five years? Porsche CEO Oliver Blume has said he doesn’t consider Xiaomi to be a competitor and claims to be “very relaxed” about its achievements on the racetrack. “Customers who love the sportiness, the driving dynamics of Porsche stick to the brand,” he told analysts in March. Nevertheless, the Stuttgart-based automaker seems to have accepted its best days in China are over. Rather than cut prices, it’s closing around one-third of its local dealers after the comparatively expensive electric Taycan and Macan failed to sell well. And Blume isn’t ruling out giving up on selling EVs in China entirely. For now, the US is essentially off-limits to Chinese EVs due to a combination of import duties and cybersecurity rules. And while European tariffs aren’t as high, Chinese luxury brands have made only limited inroads here so far. Consumer loyalty to long-established brands, the slower pace of electrification, and the difficulties of establishing sales and service networks offer Western automakers some protection at home. But in emerging markets – which Chinese automakers are now aggressively targeting – it’s a different story. Ultimately, the only way for luxury automakers to sustainably defend their premium pricing in the era of electric and software-defined vehicles is to show they can exceed the best that China can offer. From what I saw last week, that’ll be a very tall order.