Mercedes-Benz and BMW Make Big Push into Electric Cars to Compete with Tesla and Chinese Players
In a bid to fend off rising competition from Chinese automakers and catch up with Tesla, German auto giants Mercedes-Benz and BMW have unveiled their latest electric concept cars and platforms for future battery-powered vehicles.
At the IAA Mobility motor show in Munich, Germany, Mercedes-Benz introduced the Concept CLA Class, an electric vehicle built on a new architecture that will serve as the foundation for future battery cars from the company. The concept car boasts an impressive range of 750 kilometers (466 miles) and can achieve a range of 400 kilometers with just 15 minutes of charging. Mercedes-Benz CEO Ola Kallenius described the car as a “revolutionary development” for the company.
BMW, on the other hand, showcased the “Vision Neue Klasse,” another electric concept car that exemplifies the company’s electric vehicle ambitions. The Vision Neue Klasse is based on BMW’s new architecture for its EVs, with production set to begin in 2025. BMW CEO Oliver Zipse stated that the release of these cars marks a new era of innovation and sustainability for the company, and forecasted an increase in EV sales for this year. By the end of 2023, Zipse expects 15% of BMW’s global sales to be battery EVs.
Mercedes and BMW’s dedicated EV platforms represent a departure from their previous strategy of adapting combustion engine or hybrid models. Analysts believe that these new platforms will bridge the gap between European automakers and Tesla and Chinese players, although Tesla still holds a significant advantage in the market.
The competition in the electric vehicle market has intensified, with Tesla commanding 20% of the global EV market in the second quarter, followed by Chinese automaker BYD with 15%. Tesla’s aggressive price cuts have sparked a price war and put pressure on other automakers to lower their prices as well.
While Mercedes and BMW both operate in the premium segment, where they compete with Tesla’s Model S and Model X, their focus is not solely on pushing large volumes. Mercedes aims to prioritize value over volume, according to CEO Ola Kallenius. In contrast, Volkswagen plans to launch eleven new all-electric models by 2027, targeting different segments of the market with varying prices. The company aims to release the ID. 2all, an electric vehicle priced below €25,000, in 2026.
As the automotive industry shifts towards battery-powered vehicles, technological advancements have become increasingly important to attract consumers. In this regard, Tesla has established itself as the gold standard by integrating hardware and software seamlessly. BMW and other incumbents have been emphasizing their technological capabilities, such as heads-up displays and digital features, to demonstrate their ability to compete with Tesla and Chinese start-ups.
The EV market is highly competitive, and it remains to be seen whether Mercedes, BMW, and other European automakers can fully close the gap with Tesla. However, their recent announcements and investments in electric vehicles indicate a strong push towards electrification and a commitment to being major players in the electric era.