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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  • Loanword Eggcorn

    Yes, I’d consider a Mercedes (or any other) EV if it had over the air software updates, low drag, automatic steering, great styling, competitive pricing and range, and a fast charger network. Otherwise, no. Tesla currently has big advantages and a big lead. Also given a choice of two equal cars, one imported and one produced locally, I would always want to support the local economy.

  • Martin Lacey

    Mercedes have the cash to catch up with Tesla quite quickly if they wanted to. The fact that Tesla Model S beat them in their own back yard, rather than the pre-orders for Model 3 is most likely the reason for their fight back.

    You make some very good points about Mercedes build quality and I can see them being very competitive.

    For me the only concern is by buying a Merc/Audi/BMW Top of the range EV I would be “subsidizing” the emissions from their not so green vehicles. Tesla don’t raise that concern!

  • Albemarle

    Based on recent and past Mercedes actions, I still can’t see them making all the functional changes to get serious about BEVs. They remind me of companies like Kodak that deep within their heart, think that the changes they are seeing will go away. I expect Mercedes to do just enough to be in the conversation. No need to lead. They believe they can watch and wait and move when it’s necessary. Of couse, they were thinking that when upstart BMW made their move and caught up to them.
    These kind of companies are isolated from the market. They believe they are progressive because they adopt very sophisticated technology and reorganize regularly. But in the big issues, like corporate direction, they are hidebound in history and resistant to change. Tesla has nothing to worry about. The German luxury market is proving not so patriotic after all.

  • Chris O

    Maybe there is something about Tesla the incumbents just can’t replicate. In fact it was Daimler’s CEO Zetsche who went on record saying that what works for Tesla just wouldn’t work for Mercedes, as his customers just wouldn’t accept the compromises and that his customers ask for more AMG versions rather than plugs.

    373K Model 3 reservations and major shareholders expressing their concern about Tesla eating Daimler’s lunch he does appear to have changed his tune a bit. Still, if he is talking ICE conversions rather than dedicated models he is still not all in and I doubt Daimler will be rolling out those 15 minute “hyperchargers” anytime soon (nor do I know if the technology is really feasible at this point), which is too bad actually because with a network like that Daimler could be a major player in the EV market.

  • We traded our Mercedes SUV for a Tesla S last year and are very pleased with that decision. My family was sceptical, but after almost one year and 20000 km of driving, they are 100% supportive of Tesla and EV’s. Mercedes is capable of building fun and interesting EV’s, as our Smart ED is just a joy to drive and own. Even as much as I love my little commuter, doubt we’ll ever buy another MB/Smart, but you never know…

  • Yngve B

    I am looking to buy an EV, but cannot afford the Tesla Model S, and don’t want to wait until 2018 for the Model 3. I need space for my family which the e-golf and the i3 cannot provide. The Mercedes B-electric fits the bill, but since it is limited to 11kW charging that one is out as well. I think the current gen of EVs from the big manufacturers reek of compliance vehicle.

    • EVcine

      What is your price limit please take into account fuel savings?

    • Loanword Eggcorn

      Unless you’re planning to take long road trips, normal Level 2 charging is fast enough for almost all daily use. Most people charge overnight at home and have a “full tank” in the morning. Also, many families with two cars use the gas one for long trips, or rent a gas car for an occasional road trip. EVs even with 70 miles of range can easily meet the daily driving needs of most people. Most people drive within 20 miles of home on a given day.