“Technology is the Future of Luxury” #Luxury Business Group #Insight |
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Luxury in the EV Era: Who Will Own the Future?
“Technology is the Future of Luxury”: The Clash of Tradition and Innovation |
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Marketing & Communication Team |
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👀 You will learn...
✅ The competition between traditional luxury, Tesla, and Chinese EV brands
✅ The limits of legacy brands and the rise of “Tech Luxury”
✅ The key to winning: balancing technology and emotion
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EVs, Now the Industry Mainstream |
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When you hear the term electric vehicle (EV), what comes to mind?
If you are not particularly interested in cars, you might immediately think of Tesla and Elon Musk. While Tesla is certainly regarded as the symbol of EVs, sales figures and market share reveal that Chinese EV brands have already seized the global landscape.
In 2024, global EV sales surpassed 17 million units, accounting for 20% of the entire automobile market. By 2025, that figure is projected to expand to 25%. EVs are no longer a niche but rather the new mainstream of the industry.
This raises an important question: Will Tesla and Chinese brands, which are leading in EV technology, secure their place in the next generation of luxury automobiles? Or will traditional luxury brands such as Porsche, Mercedes-Benz, and BMW be able to preserve their prestige?
Today, we will explore both the EV dilemma facing luxury brands and the rise of Chinese EV manufacturers dominating the global market. |
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The Struggle of EV Transition
Traditional luxury brands such as Porsche, Mercedes-Benz, and Audi have invested billions of dollars and announced their commitment to electrification. But the reality has proven difficult.
According to a recent Bloomberg article, “Despite investing billions of dollars, luxury automakers like Porsche, Mercedes, and Audi are failing to persuade their wealthiest customers to adopt EVs.” The Porsche Taycan once drew attention by outselling the 911, but limitations in driving range, frequent software glitches, and low resale value significantly reduced its appeal. Similarly, Mercedes’ EQS, despite its premium pricing, has failed to generate sufficient demand.
Media outlets analyzed this in two ways. First, a lack of sensory experience. For luxury clients, a car is not merely a means of transportation—it is an object through which they consume brand heritage and emotional satisfaction. Heritage validated by history, the roar of an internal combustion engine, the vibrations during driving, and the mechanical perfection born of craftsmanship have long been icons of luxury. EVs, they argue, have yet to replace this emotional resonance.
Second, a gap in technological competitiveness. Tesla created the narrative that “software is the new premium” with OTA updates and autonomous driving features, while Chinese brands expanded on this with ultra-fast charging, battery swapping, and AI-based interfaces. By contrast, many traditional brands’ early EVs were conversions of internal combustion platforms, lacking optimization. Their range was shorter, charging was slower, and infotainment systems were unstable. From the consumer perspective, there was little reason to choose what analysts describe as an “expensive yet technologically inferior car.” |
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Tesla: The Beginning of a New Luxury
Tesla presented a new code for luxury automobiles. Minimalist design, a UI centered on large screens, autonomous driving features, and OTA updates redefined the car from a simple machine into a moving software platform. This was an experience that traditional luxury brands had failed to provide.
Of course, challenges remain for Tesla, as media outlets point out. According to Bloomberg and J.D. Power, critics have noted that EVs provide relatively less sensory satisfaction compared to internal combustion engines, and quality control and service issues have been consistently raised. Problems such as inconsistent build quality, repair delays, and poor service center responsiveness have been repeatedly reported.
Nonetheless, the narrative of “technology-driven luxury” opened by Tesla became a powerful catalyst for Chinese brands. |
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China Expands into Tech Luxury 2.0
Chinese brands have expanded the EV market both faster and wider. BYD built a vertically integrated ecosystem from battery cells to finished vehicles, surpassing Tesla to become the world’s largest EV manufacturer. Nio, Xpeng, and Li Auto are pioneering a new segment referred to as “Tech Luxury.”
Chinese-style tech luxury can be summarized in four dimensions:
- Immersive Digital Experience – Large screens, AR/VR interfaces transforming the vehicle into a “mobile living space.”
- AI-Based Personalization – Emotional bonds replaced with technology, such as Nio’s AI assistant NOMI.
- Ongoing Value Expansion – Luxury experiences that grow over time through OTA updates.
- Technological Marvels – Features such as the Yangwang U8’s tank turn and water driving, where technology itself becomes a symbol of status.
Additionally, China controls 80% of global EV battery production and has built a vertically integrated ecosystem linking charging infrastructure, services, and communities. Nio’s “Nio House” is more than a showroom—it doubles as a café, library, and co-working space, binding customers into a “brand fandom” rather than treating them as mere buyers.
This movement is not just about adding new features; it demonstrates the paradigm that “technology is the future of luxury.” Traditional luxury brands, too, must now consider how to integrate technological elements with their heritage and emotional storytelling.
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Where Does the Essence of Luxury Lie?
Does this mean tech luxury will completely replace traditional luxury? It is too early to draw such a conclusion, and the answer is not yet.
The new standards of luxury being shaped by EV companies are clear: they focus on the customer’s present and future experiences, rather than the brand’s past heritage. Instead of leather grades or engine cylinders, software versions and AI empathy capabilities are becoming the new measures of value.
But “tech luxury” alone cannot fully compete with more than a century of accumulated depth. True luxury begins with products but is ultimately completed through people and experiences. Meticulous VIP care at every customer touchpoint, sales staff who embody the brand philosophy, and engineers who can read emotions beyond technology—the “luxury mindset”—cannot be built overnight. This remains the last bastion and a powerful weapon of traditional luxury brands, and a necessary dimension that EV makers must cultivate going forward.
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The Questions of the Future
The future of luxury EVs can ultimately be condensed into three questions:
- Traditional Powerhouses – How quickly can they close the technology gap without losing the emotional experience?
- Chinese Challengers – Beyond technological innovation, how deeply can they embody true luxury sentiment?
- Tesla – Can it remain the icon of innovation, or will it be caught between China’s speed and the heritage of traditional brands?
Including Tesla, Chinese brands now hold 67% of the global EV market, and their tech luxury has become an undeniable force of innovation. However, luxury consumers still believe that the emotional depth and service experience offered by traditional brands remain irreplaceable.
In the end, the winner of the future luxury market will be the brand that can prove both technology and emotion, innovation and heritage, at the same time.
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Luxury Business Group (LBG) |
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In today’s luxury automotive industry, advanced technology is no longer a differentiator—it’s the baseline.
What sets brands apart is the mindset of employees shaping customer experiences at every touchpoint. Excellence, Empathy, and Elegance—these aren’t just service skills, but the foundations of lasting brand equity.
👉 How can employee mindset truly become a competitive advantage in luxury? |
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In today’s luxury automotive industry, advanced technology is no longer a differentiator—it’s the baseline.
What sets brands apart is the mindset of employees shaping customer experiences at every touchpoint. Excellence, Empathy, and Elegance—these aren’t just service skills, but the foundations of lasting brand equity.
👉 How can employee mindset truly become a competitive advantage in luxury? |
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Company B’s Fashion Division: Redefining Luxury Retail Sales Strategy in the No-Normal Era
✨ Sales is no longer just about technique.
An empathy-driven approach that respects clients’ emotions and preferences is what truly differentiates the brand experience.
Through LBI’s tailored program, Company B’s fashion sales team have evolved from product sellers into designers of brand experiences.
By understanding each client’s story and transforming every interaction into a memorable moment, this training case shows how sales can become a powerful driver of connection.
👉 Discover Company B’s sales innovation journey at the link below. |
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While the hotel industry struggles with labor shortages, Parnas Hotel took a different path: investing in employee growth and happiness instead of just filling positions. |
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A Differentiated VIC Management Strategy Moves the Needle.
High Jewelry Brand B aligned CRM × Sales into one playbook and used wine storytelling as an execution language to elevate the client experience.
Brands that unify CRM and Sales are the ones key clients return to.
👉 Read the full case in the post. |
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📌Brand Store Operations
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📌Planning and Branding
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- Would you like to share news about our company with luxury businesses, brands, and professionals?
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- Are you planning to create premium spaces for VIPs?
📌Corporate Training and Recruitment
- Are you looking for a training program that is more distinctive than traditional corporate programs? (Luxury attitude, new normal selling skills, storytelling, employee/brand branding, etc.)
- Do you need a training program customized to your brand?
- Do you need to recruit top-tier talent that aligns with your company or brand?
Luxury Business Group (LBG) supports numerous companies in the luxury service and retail sectors across Europe and Asia, leveraging its unparalleled expertise in providing total solutions for service and retail training and consulting.
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Luxury Business Group (LBG)
LBG Marketing & Communication Team | Gayoung Lee, Jade Lee, Booki Jung |
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