BMW and Mercedes Make Big Push into Electric Cars to Compete with Tesla and Chinese Players
Introduction
BMW and Mercedes are ramping up their efforts in the electric car market in order to fend off competition from Chinese players and catch up with Tesla. Recently, both automakers unveiled electric concept cars and new platforms for their future battery-powered vehicles.
European carmakers have been perceived to be behind Chinese companies like BYD and Tesla, so they need to show the market that they are ready to be major players in the electric era.
Mercedes-Benz introduced its Concept CLA Class, an electric vehicle with a range of 750 kilometers (466 miles) and the ability to reach a range of 400 kilometers with just 15 minutes of charging. Mercedes CEO Ola Kallenius called it a “revolutionary development” for the company.
BMW showcased the “Vision Neue Klasse,” an electric concept car that represents the company’s EV ambitions. The first vehicles based on this platform will enter production in 2025. BMW CEO Oliver Zipse stated that BMW aims to double its EV sales this year and have 15% of its global sales be battery EVs by the end of 2023.
While Mercedes and BMW’s new platforms are a significant step forward, analysts believe they may still lag behind Tesla.
Price War in Focus
The electric vehicle market is highly competitive, with Tesla and various Chinese players dominating the scene. Tesla commanded 20% of the global EV market in the second quarter, followed by BYD with 15% market share. Tesla’s price cuts have sparked a price war, forcing other automakers to adjust their strategies.
Mercedes and BMW operate in the premium segment of the market, competing with Tesla’s Model S and Model X. While they plan to release more EVs in the coming years, Mercedes emphasizes that its focus is on value over volume.
Volkswagen, on the other hand, plans to release eleven new all-electric models by 2027, targeting different market segments with various price points. In 2026, Volkswagen aims to launch the ID.2all, an electric vehicle priced below 25,000 euros ($26,942).
Tesla, China Dominate with Tech in Focus
In the electric vehicle market, technology plays a crucial role in attracting consumers. Tesla has set the standard with its vertically integrated platform, offering features like Autopilot and a smartphone-like user experience. Chinese automakers like Xpeng and Nio also market their semi-autonomous driving features.
At the IAA conference, established automakers like BMW have been highlighting their technological capabilities to demonstrate that they can compete with Tesla and Chinese startups. For example, BMW’s Vision Neue Klasse EV features a heads-up display that projects information onto the driver’s windshield.
BMW CEO Zipse described the Vision Neue Klasse as a significant investment in the digital side of the car, including semiconductors.
