Why premium brands attack Chinese EVs: a positional goods reading

A watch with exactly the precision of a Rolex, without the logo on the dial – and at a fraction of the price. The function is identical. All that is missing is the social seal.

That is precisely what Chinese EVs did to the car. And it is why premium brands are so uncomfortable.

BYD, Nio, Xiaomi, and Zeekr are not only competing on durability, handling, or service networks against Toyota, BMW, and Mercedes. The real fight is over something else: status. Underneath the technical debate lies a social dynamic – that of positional goods, whose value comes less from usefulness than from the relative position they confer in front of others.

The concept: Hirsch and Frank

The term was coined by Fred Hirsch in Social Limits to Growth (1976). For Hirsch, these goods are socially scarce: their supply is fixed, or nearly so, without a loss of quality. Unlike food, basic technology, or generic transport – whose value is intrinsic and grows with mass production – positional goods draw their utility from social comparison and exclusivity.

Hirsch’s classic examples: old master paintings, limited landscapes, exclusive suburban land, leadership positions, authentic tourist destinations, status symbols. As more people gain access to the good, its relative value collapses – everyone stands on tiptoe to see the parade and nobody sees any better.

Robert H. Frank expanded the idea with “positional externalities” and consumption “arms races.” For him, bigger houses, luxury cars, expensive jewellery, or elite education are positional because the assessment depends on relative context: a good car is one that compares favourably to the others in the same environment. When the standard set by the wealthiest rises, everyone else spends more just to hold their position – social waste with no real gain in well-being.

In cars, BMW, Mercedes, and premium Toyota work exactly this way: they are not transport, they are markers of status, heritage, and refinement.

The reaction from owners and influencers

The discomfort here does not come from rejecting what you own. It comes from the opposite: far more people now reach the same level of comfort, technology, safety, and performance – without paying for the brand’s prestige. That dilutes the relative advantage. The response is predictable:

Exalt the “heritage,” the “soul,” the “refined engineering,” and the “proven reliability” of the legacy brands.
Attack the Chinese makers for “lacking soul,” “inferior build quality,” “cheap plastic,” “long-term problems,” “design copying,” or geopolitical risk.

The effect is to preserve the distinction: “my car has something theirs does not – regardless of price or spec sheet.”

The high-reach influencers

Creators with hundreds of thousands of followers illustrate this well. Joe Achilles and Peter Greaves (Drive Torque Podcast) attack Chinese marketing, paid reviews, and the “invasion” threatening BMW and Mercedes. They defend European heritage and engineering as superior and question the durability and transparency of the Chinese makers – without acknowledging that the positional value of the brands they defend is being eroded precisely by affordability.

Others echo the same: Toyota is legendary reliability; BMW and Mercedes are the “driving experience” and the prestige; while Chinese EVs become “too cheap to be good,” with “soulless” interiors and the spectres of resale value and service coverage. The criticism protects the emotional investment – and the status – tied up in the legacy brands.

The evidence: quality and performance of Chinese EVs

And the numbers do not help that narrative. Chinese EVs are delivering equivalent quality, technology, and performance – superior in several respects – at a far lower cost, attacking the legacy brands’ positional exclusivity head on.

Safety – back to the watch without a logo, this is Volvo’s historic ground. The Zeekr X (from Geely, Volvo’s parent company) was named by Euro NCAP the safest small SUV and the safest EV tested in 2024, with 91% protection for adult occupants and 90% for children. Other Chinese models – such as the BYD Seal and Zeekr 001 – also took five stars, beating or matching Volvo, Mercedes, and BMW in independent testing.

Performance – the Xiaomi SU7 Ultra is the emblematic case: 0-100 km/h in 1.98 s (quicker than a Bugatti Chiron by that measure), over 1,500 hp, and record times at the Nürburgring, where it has already beaten the Porsche Taycan Turbo GT in the four-door category.

And the industry’s own executives admit it. Jim Farley, Ford’s CEO, imported a Xiaomi SU7 from Shanghai and has been driving it for six months – “I don’t want to give it up,” he said. For him, the Chinese makers’ onboard technology and build quality are “far superior” to what is seen in the West, and China’s advance is “the most humbling thing I have ever seen”: frictionless digital integration, user experience, and efficiency at a level the American industry is not matching.

Status against real value

The reaction is the natural consequence of luxury’s positional character: when exclusivity falls, the defence of the brand as an identity symbol grows louder. The legacy makers still deliver established service networks, refined driving, and cultural weight in many markets. But insisting on dismissing the “new one without a logo” obscures the calculation that matters: total cost of ownership, innovation, and actual need.

Reading the phenomenon through the positional goods lens separates emotion from fact. For the consumer, the way forward is to prioritise what the car delivers, not the status signal it emits. The market has already understood: the Chinese “democratisation” pushed the contest back to where it belonged – real value.

References

Hirsch, Fred. Social Limits to Growth (1976).
Frank, Robert H. – works on positional externalities and Luxury Fever.
Euro NCAP – 2024 ratings and “Best in Class” awards (Zeekr X, BYD, Zeekr 001, and others).
Statements by Jim Farley (Fully Charged / Everything Electric Show, 2024; Aspen Ideas Festival, 2025).
Xiaomi SU7 Ultra performance (official figures and Nürburgring times, 2024-2025).
Drive Torque Podcast (Joe Achilles and Peter Greaves).
Market reports and independent testing (Bloomberg, Autoevolution, and others).