The electric vehicle (EV) market has seen a surge in competition, primarily led by Chinese players and Tesla, prompting traditional automakers such as BMW and Mercedes to accelerate their electric ambitions. At the IAA Mobility motor show in Munich, Germany, both BMW and Mercedes unveiled groundbreaking electric concept cars and new platforms designed to propel their battery-powered vehicles into the future.
Mercedes-Benz took center stage at the IAA Mobility motor show by unveiling its Concept CLA Class, an electric vehicle that sets a new standard for the German auto giant. Built on a new architecture, this concept car boasts an impressive range of 750 kilometers (466 miles) and can reach 400 kilometers with just 15 minutes of charging. Mercedes CEO Ola Kallenius proudly proclaimed the Concept CLA Class to be a “revolutionary development” for the company, showcasing unmatched efficiency, range, and fast charging capabilities.
Not to be outdone, BMW showcased its electric concept car, the “Vision Neue Klasse,” highlighting its commitment to electric mobility. This concept car is the first glimpse into BMW’s new architecture for EVs, with production vehicles set to hit the road in 2025. BMW CEO Oliver Zipse expressed his enthusiasm for this new era of innovation and sustainability, stating that BMW aims to double its EV sales this year and have 15% of its global sales attributed to battery EVs by the end of 2023.
Traditionally, Mercedes and BMW would adapt combustion engine or hybrid models and add batteries. However, these dedicated EV platforms represent a significant departure from past strategies and mark the companies’ most robust foray into the electric vehicle era. While these announcements are indeed major steps for Mercedes and BMW, some analysts argue that they may still leave the automakers trailing behind Tesla.
Tesla currently dominates the global EV market with a 20% share in the second quarter, closely followed by Chinese company BYD at 15%. The rise of Tesla and increasing competition from Chinese automakers have fueled a price war within the market, prompting companies to cut prices to gain market share. As both Mercedes and BMW operate in the premium segment, where Tesla’s Model S and Model X compete, they face a unique set of challenges. While they prepare to release more EVs in the coming years, Mercedes remains focused on value over volume, asserting that their goal is not to push large sales volumes.
Volkswagen has adopted a different strategy, aiming to capture different segments of the market by releasing electric vehicles at various price points. The German auto giant plans to launch eleven all-electric models by 2027, including the ID. GTI Concept electric vehicle, with a production version scheduled for release in 2027. Furthermore, Volkswagen announced its intentions to introduce the ID. 2all, an affordable electric vehicle priced below 25,000 euros ($26,942) by 2026. This diversified approach allows Volkswagen to cater to a wider range of consumers and compete more effectively with both Tesla and Chinese automakers.
As the EV market evolves, it becomes evident that technology plays a crucial role in capturing consumers’ attention and loyalty. Counterpoint Research suggests that premium electric vehicles should resemble smartphones more than traditional cars, taking inspiration from Tesla’s vertically integrated platform. Tesla’s Autopilot features, large internal screen, and extensive app integration create a seamless and futuristic user experience. Chinese automakers such as Xpeng and Nio have also embraced the integration of semi-autonomous driving features into their vehicles. BMW recognizes the importance of technology and has equipped its Vision Neue Klasse EV with a heads-up display that projects information onto the driver’s windscreen. By investing heavily in digital technologies and semiconductors, BMW aims to enhance the overall driving experience and create a truly digital car.
With their latest electric concept cars and dedicated EV platforms, BMW and Mercedes are making a statement in the electric vehicle market, asserting their readiness to compete with Tesla and Chinese automakers. While they may not have completely closed the gap, these advancements demonstrate the European automakers’ ability to create compelling products in the near future. As the market continues to evolve, technology will become increasingly important, driving innovation and redefining the driving experience. The race for the top spot in the EV market is intensifying, and only time will tell if BMW and Mercedes can rise to the challenge and establish themselves as major players in the electric era.
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