- On Sunday, Mercedes-Benz unveiled the CLA-Class concept, an electric vehicle based on a new architecture that will underpin future battery cars from the German auto giant.
- Meanwhile, rival BMW unveiled the “Vision Neue Klasse” on Saturday, another electric concept car that underlines the company’s electric ambitions.
- European automakers said to be behind Chinese companies and Elon Musk’s Tesla have had to move quickly to show they are ready to play a major role in the electric age.
BMW presented the Vision Neue Klasse electric vehicle at the IAA in Munich. It underpins BMW’s big push towards electric vehicles.
BMW
MUNICH, Germany (AP) — BMW and Mercedes are making their biggest push yet into electric cars as they look to face increasing competition from Chinese suppliers and catch up with U.S. giant Tesla.
In recent days, the automotive giants unveiled electric concept cars and new platforms for their future battery-powered vehicles at the IAA Mobility motor show in Munich.
European automakers, said to be behind Chinese companies like Warren Buffett-backed BYD and Elon Musk’s Tesla, have had to act quickly to show the market they are ready to play a major role in the electric age.
On Sunday, Mercedes-Benz unveiled its Concept CLA-Class, an electric vehicle based on a new architecture that will underpin future battery cars from the German auto giant. The company said the concept car has a range of 750 kilometers (466 miles) and can achieve a range of 400 kilometers with just 15 minutes of charging.
Mercedes boss Ola Kallenius commented on the car, calling it a “revolutionary development” for the German company.
“With these efficiency numbers, this range, this type of fast charging, I don’t know of any vehicle in this class that can compete with it,” Kallenius told CNBC’s Annette Weisbach on Sunday.
On Saturday, competitor BMW presented the “Vision Neue Klasse,” another electric concept car that underlines the company’s electric ambitions. New class is BMW’s new architecture for its electric vehicles. The first vehicles based on this platform are scheduled to go into production in 2025.
“These cars will be on the road in just two years and we are taking BMW as a whole into a new era of innovation and sustainability. That is the purpose of our show here at the IAA,” BMW boss Oliver Zipse told CNBC Arabile Gumede.
Zipse said BMW will double its electric vehicle sales this year. By the end of 2023, 15% of BMW’s global sales will be battery-powered electric vehicles, he added.
Mercedes and BMW’s dedicated EV platforms represent a departure from previous architecture, in which they adapted combustion engine or hybrid models and added batteries. This is the company’s biggest push yet toward a new platform for the electric vehicle era.
Analysts said the announcements from Mercedes and BMW were big steps, but they could still lag behind Tesla.
“The new platforms at Mercedes and BMW show for the first time what the European OEMs offer.” [original equipment manufacturers] will be able to do this. These cars will likely be a year away, but their specifications show that European OEMs will be able to develop compelling products,” Daniel Roeska, senior research analyst at Bernstein Research, told CNBC by email.
Roeska said these new platforms will close “a lot of the gap” with Tesla and the Chinese players, “but not completely.”
BMW and Mercedes continue to push into an increasingly competitive electric vehicle market largely dominated by Tesla and various Chinese players.
According to Counterpoint Research, Tesla dominated 20% of the global electric vehicle market in the second quarter, followed by 15% for BYD.
And competition has become fiercer thanks to a price war largely sparked by Tesla. The US automaker began cutting prices in 2023 and promised to sacrifice margins in the short term to gain market share.
Mercedes and BMW both play in the premium segment of the market, where cars like Tesla’s Model S and Model X compete. As Mercedes prepares to launch more electric vehicles in the coming years, it remains clear that its focus is not on driving high volumes.
“We’re not pushing volume, we’re focusing on value rather than volume,” Kallenius said.
Meanwhile, Volkswagen’s strategy appears to be to launch cars at different price points to capture different market segments.
The company announced on Sunday that it will launch 11 new all-electric models by 2027, underscoring its preference for electric vehicles. Volkswagen wants to bring the ID onto the market in 2026. 2all, an electric vehicle that sells for less than 25,000 euros (US$26,942).
The German car giant presented the ID. GTI concept electric vehicle unveiled at the IAA and said a production version of the car should hit the roads in 2027.
In a world where batteries power cars, it’s not just the design of the car or the engine that will win over consumers. Technology is becoming more and more important.
“Premium electric vehicles now need to be more like smartphones than traditional cars to provide a similar experience to Tesla – the gold standard in electric vehicles with its vertically integrated platform,” Counterpoint said in a note last week.
In fact, Tesla has built its business on controlling the hardware – the car itself – as well as the software within it. Musk often mentions the company’s Autopilot features, which allow the car to perform some driving functions autonomously. Tesla’s large internal screen and apps make it feel more like using a smartphone.
Many of China’s automakers, including upstarts Xpeng and Nio, are also marketing their semi-autonomous driving features.
At the IAA conference, established companies also highlighted their technical capabilities to show that they too can keep up with Tesla and the Chinese start-ups.
BMW, for example, said its Vision Neue Klasse EV features a heads-up display that projects information onto the driver’s windshield.
BMW boss Zipse said that the Vision Neue Klasse represents the “biggest investment” in a car on the “digital side,” which also includes semiconductors.
“It’s a completely digital feeling for the car,” said Zipse.