Why are luxury cars being converted to electric cars?

 Have you ever wondered, why are Luxury Cars being converted into Electric Cars in the first place? The reason may be very simple.

Toyota's Announcement:

Toyota has set its annual EV sales target by 2030.

It has been significantly increased from the previous 2 million units to 3.5 million units.

European companies such as Volkswagen and Benz and American companies such as GM have already declared plans to change half of their vehicles to electric vehicles by 2030, but Toyota has been passive about electric vehicles.

Another important thing to note about this presentation. The previous goal of '2 million electric vehicles by 2030' included not only electric vehicles but also hydrogen-fuel cell vehicles.

The amended target of '3.5 million electric vehicles in 2030' is purely electric vehicles.

Of course, Toyota is adhering to the 'full-line-up strategy' of providing not only electric vehicles. But also various powertrains such as hybrids, plug-ins, fuel cell vehicles, and biofuels to meet consumer needs.

With this announcement, even Toyota showed that the central axis of the future powertrain is shifting to electric vehicles. Because as you know Toyota has always been lukewarm about Electric Vehicles.

Toyota will invest 4 trillion yen in electric vehicles by 2030. And 2 trillion yen out of 4 trillion yen will be spent on batteries.

In an announcement last September, Toyota announced that it would invest 1.5 trillion yen in batteries. Which increased the investment cost by 33% to 2 trillion yen in just three months.

Lexus conversion to Electric Vehicle:

However, the most shocking thing about Toyota's announcement this time was something else.

As for Lexus, its luxury car brand, it announced that it would sell only 100% electric vehicles in its main markets, Europe, North America, and China, by 2030, and in all markets by 2035.

[caption id="attachment_4256" align="aligncenter" width="300"] Lexus UX 300e[/caption]

The fact that Lexus is going to be 100% electric in the not-too-distant future. It is perhaps the most important part of this Toyota announcement.

The conversion of luxury car companies to electric vehicles is not just limited to Lexus. Even before Lexus, German luxury car companies first declared that they would switch to 100% electric vehicles.

Similar Announcements:

Mercedes-Benz announced in July that all of its new cars will be electric by 2030.

It's not just Benz. Jaguar has announced that it will only sell electric vehicles from 2025.

BMW's small luxury car brand, MINI, said it would stop selling engine-equipped vehicles around 2025.

Germany's Audi has announced that all new cars will be electric by 2026.

Volvo also said it will sell 100% electric vehicles by 2030.

Following European luxury cars such as Mercedes-Benz and Audi. Lexus is also saying that it will change to 100% electric vehicles.

It will be difficult to respond to the environment as a large and heavy luxury car with strong engine performance.

However, in Toyota's announcement on the 14th, an executive in charge of Lexus said that the reason Lexus is going 100% electric is "because customers want it."

As a result of market research. We found that there is a very clear correlation between wealthy consumers wanting more electric vehicles. And 'the richer you are, the more electric vehicles.

This is probably the reason why Mercedes-Benz and Audi are most active in the transition to electric vehicles. And also the reason why Hyundai Motor Company announced. That all-new vehicles launched as Genesis from 2025 will be electric vehicles (including hydrogen fuel cell vehicles).

In other words, the environment is the environment, but customers want electric vehicles.

The more wealthy customers, the more they want electric vehicles. This is probably the reason why even Toyota announced that it would go 100% electric as much as Lexus.

Why do rich people prefer Electric Cars:

Why do luxury car consumers prefer electric vehicles? Then, why is it that the high-income class and the wealthy consumers will want electric vehicles more in the future?

It's been a long time coming, but that's the gist of what I'm going to talk about today.

In the automotive field, the word 'advanced' and the word 'electric vehicle' are becoming synonymous.

Of course, electric vehicles are also useful as 'short-distance commuters', as small electric vehicles costing about $5,000 are very popular in China.

On the contrary, as we move into the world of luxury cars, we need to know that in the future there will be no choice but to be electric.

The idea is that electric cars are better suited to value the rich want from cars than internal combustion engines.

Comfortable Ride:

Luxury car consumers want a car that is more powerful than any other car when needed but provides a comfortable ride and smooth driving experience.

A high-performance internal combustion locomotive that runs with its characteristic vibration and smell and loud sound seems to be more powerful, but an electric car is actually more powerful.

Let's see the acceleration from standstill to 100 km/h.

It's not easy for a top-performing internal combustion locomotive to give three invites, but vehicles like Tesla's Model S Plaid easily give two invites.

Luxury internal combustion locomotives, namely companies such as Mercedes-Benz, BMW, and Audi, have invested enormous amounts of technology and money to ensure that they run smoothly, that is, that the vehicle moves smoothly and linearly according to the driver's intentions without jerking.

However, no matter how hard they try in this respect, it is difficult for an internal combustion engine vehicle to beat an electric car.

Because of structural limitations. It is impossible for an internal combustion engine to keep up with an electric car when it comes to fine-tuning the drive and making the vehicle respond immediately to the driver's intentions.

Powerful performance and a smooth driving experience are always what luxury car customers want.

That's why people who have ridden a luxury electric car are saying that they will never go back to a luxury car with an internal combustion engine.

SDV:

Another reason is that the electric SDV (Software Defined Vehicle), which integrates control with software and improves all functions through over-the-air (OTA) That is, it is very attractive to the high-income class who want to do it.

Although Tesla is already doing it, other luxury car makers are planning to release a car that enables OTA at a level similar to or surpassing Tesla in 2024-2025.

If electric vehicles attract luxury customers by enabling high-performance and linear driving experience in terms of hardware, software-wise, OTA can always provide a luxurious experience and timeless pleasure to Go.
But there is one problem.

To do this top-notch OTA, the vehicle's electric and electronic platform must be completely changed, and a high-performance processor must be installed in the center.

Is it cost-effective?

The price of the integrated control unit including this high-performance processor is not cheap.

In the case of Tesla, such an expensive integrated control unit is installed by default in all models, but this is possible because it is Tesla. The industry estimates that the cost of this high-performance computer is around $2,000.

In the existing automobile industry, it is too expensive to install. You can't put a high-performance computer that costs $2,000 in an entry-level compact car.

The automobile industry is a world that requires extreme cost reduction to the extent that departments fight over whether to add or remove parts for $1 or $2.

In the existing automobile industry, there are only high-end car brands that can afford such high-performance computers.

So even Toyota, which was passive about electric cars, had no choice but to announce that Lexus would go 100% electric.