Fighting Tesla’s Luxury Segment Dominance, Mercedes-Benz Announces Four New All-Electric Models By 2020

For the last four years, anyone wanting a premium, luxury all-electric electric car has been faced with something of a Hobson’s choice: a Tesla Model S electric sedan or, more recently, the Tesla Model X electric crossover SUV.

As a consequence, we’ve seen Tesla gain a massive dominance in the premium car segment, stealing market share from established premium brands like Audi, Mercedes-Benz, BMW and Porsche. Even in Germany, where loyalty for the four domestic premium automakers is strong, Tesla and its super-sexy, advanced electric cars has been gaining market share while other brands lose out.

So far, Mercedes-Benz has focused on plug-in hybrids -- but all-electric models are on the way.

So far, Mercedes-Benz has focused on plug-in hybrids — but all-electric models are on the way.

So far, each brand Tesla has stolen customers from has made some attempts to win customers back, either through high-end luxury plug-in hybrids or the promise of fully-electric ‘Tesla-fighters’ like the Audi Q6 e-tron Quattro or the Porsche Mission E. And now Mercedes-Benz has announced its own offensive on Tesla, promising four brand-new luxury electric cars by 2020.

While Mercedes-Benz has been working on designs for new electric models to cross-shop against Tesla in the luxury car marketplace for some time, British magazine AutoCar now reports that the company has accelerated its plans to bring those vehicles to market.

Four new electric models are promised by 2020, including two SUVs.

Four new electric models are promised by 2020, including two SUVs.

The reason? AutoCar reports the gear change has been prompted in part by Germany’s recently-announced €1.2 billion  ($1.4 billion) electric car incentive scheme, but we’d guess (while Mercedes-Benz isn’t about to admit it) Tesla’s vice-like grip on the premium plug-in segment has a part to play as well.

At the heart of Mercedes-Benz’s electric car plans are two new electric sedans and two new electric SUVs. Unlike the B-Class Electric Drive — Mercedes-Benz’s only production electric car to date — AutoCar says the new vehicles will be sold under their own model names rather than electric variants of existing models.

Don’t think however that this means four brand-new vehicles designed from the ground-up as electric cars. Instead, we understand that Mercedes-Benz will make use of existing platforms and design elements for its new electric offerings, differentiating them from its fossil-fueled vehicles through distinctive badging and body panels as well as completely new interiors designed exclusively for its electric range.

A similar practice will give rise to all-new hydrogen fuel cell vehicles based on existing gasoline and diesel-powered models, dramatically expanding Mercedes-Benz’s low-emission offerings.

While Mercedes-Benz is not openly talking about its plans — AutoCar is basing its report on internal contacts at the automaker — the push towards electric cars is believed to have been orchestrated by Thomas Weber, head of Mercedes-Benz’s research and development. While Weber is about to depart the automaker for pastures new, it is understood from previous comments made by the executive that Mercedes-Benz’s all-electric lineup will include a C-class derived electric sedan and an S-Class derived electric sedan. Its all-electric SUVs meanwhile are believed to be based on its existing GLA and GLC models.

Despite producing the B-Class ED, Benz says it hasn't viewed EV production as cost-effective.

Despite producing the B-Class ED, Benz says it hasn’t viewed EV production as cost-effective.

Batteries will likely come from Mercedes-Benz’s existing facilities, while motors will also be built in house: while it’s not clear if cars will be offered with rear-wheel or all-wheel drive capabilities, a range of motors are being planned ranging from 75 kilowatts through to 400 kilowatts.

Together, the four models should give Mercedes-Benz a fighting chance at keeping — or perhaps even regaining — existing and former owners as it transitions from internal combustion engines to electric. Given Mercedes-Benz’s own work on autonomous vehicle and advanced safety technologies, the quartet of plug-ins could even make Mercedes-Benz a worthy adversary of Tesla.

But that’s a big ‘if’: while Mercedes-Benz leads Tesla when it comes to things like build quality and certain premium in-car features, Tesla’s Autopilot capabilities, over-the-air software update and free-to-use Supercharger network will take some beating.

To truly become Tesla’s equal, Mercedes-Benz would need to need to offer a similar network of ‘free’ charging stations for its customers, either building its own network or pairing with existing charging providers to ensure customers could charge wherever they found a compatible charging station. Additionally, it would need to match Tesla’s over-the-air software update capabilities and its autonomous driving capabilities. Since Mercedes-Benz is already working on both, we don’t see that as being a particular problem for the German brand.

Of course, Mercedes-Benz would also need to match Tesla in terms of performance, range and price of its cars. Again, we don’t see a particular problem here, especially if Mercedes-Benz opts to use the next-generation CCS technology being touted that is capable of replenishing the battery pack of a 200+ mile electric car from empty to 80-percent full in just 15 minutes.

Mercedes-Benz will have to work hard to catch Tesla, and harder still to beat it.

Mercedes-Benz will have to work hard to catch Tesla, and harder still to beat it.

As for price? According to AutoCar, Mercedes-Benz has refrained from building large qualities of electric cars due to concerns over economies of scale. Believing that quantities of 50,000 cars per year were needed before making electric cars were truly cost-effective, the company has held off making cars until it can see a good business case for doing so.

We’re guessing the massive number of pre-reservations for the Tesla Model 3 has proven that time has now arrived.

Would you consider an all-electric Mercedes-Benz over a Tesla if they were similar in price and specification? Do you think Tesla should be worried that german automakers like Mercedes-Benz are now planning to take on the California company with their own plug-in cars?

Or do you think there’s something about Tesla that older, more traditional automakers just can’t replicate?

Leave your thoughts in the Comments below.

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