Bugatti's CEO argues the high-end auto market is bifurcating. While the mainstream adopts EVs, the wealthiest buyers are rejecting electronics for the craftsmanship and emotional appeal of precision-engineered internal combustion engines, treating them like mechanical luxury watches.

Ferrari sells the irrational noise and mechanical drama of a combustion engine, not just transportation. By creating a silent, efficient EV, it becomes an expensive appliance, confusing its core value proposition. This is a classic brand mistake of prioritizing technology over the emotional essence of a luxury product.

Japanese carmakers, historically dominant due to their expertise in mechanical engineering for petrol cars, are struggling because electric vehicles are fundamentally different. EVs are more like 'computers on wheels,' where competitive advantage lies in software and features, an area where Japanese firms have lagged.

By deliberately incorporating physical buttons and switches, Ferrari’s first EV, designed by Apple's Jony Ive, challenges the industry's iPhone-inspired aesthetic. This suggests a broader pivot in user experience away from digital-only interfaces as screen fatigue grows.

Leno says Porsche is moving upscale like Ferrari, selling fewer cars to richer buyers. He contrasts that with Corvette, which remains aspirational for a plumber. Hotels and restaurants are also splitting into cheap and luxury tiers, with the middle dying, he says.

By canceling its EV project while Ferrari pushes forward with electrification, Lamborghini is paradoxically solidifying its position as the preferred brand for purist car enthusiasts. This reverses the historical dynamic where Ferrari was seen as the enthusiast's choice and Lamborghini for show-offs.

As self-driving improves, consumers will seek cars for two distinct purposes: utilitarian "appliances" that drive themselves, or engaging, fun-to-drive vehicles with manual controls. Manufacturers trying to be mediocre at both will lose to specialists in either category.

The automotive industry is facing a disruption comparable to the Swiss watch quartz crisis. As electric drivetrains standardize commoditized hyper-performance and digitization, high-end carmakers cannot compete purely on acceleration metrics. Luxury manufacturers are abandoning pure EV roadmaps for bespoke hypercars, reviving analog switches, manual gearboxes, and internal combustion configurations to establish durable value through sensory, emotional, and craftsmanship status symbols.

Leno compares electric cars to quartz watches: accurate and cheap but less emotional. He expects supercars to become weekend toys like snowmobiles, while buyers still pay for more valves, cams and the feel of winding a mechanical watch. Mechanical complexity becomes the luxury.