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Mercedes Plans 10 Electric Cars to Take on Tesla

Sept. 29, 2016
“We’re now flipping the switch,” Daimler COE  Dieter Zetsche said. “We’re ready for the launch of an electric product offensive that will cover all vehicle segments, from the compact to the luxury class.”

In hopes of taking on Tesla Motors, Mercedes-Benz plans at least 10 new battery-powered cars in the coming years and will bundle its electric-vehicle technology, including charging boxes and energy storage, under the EQ brand.

Mercedes’s first new all-electric models will be a coupe-like sport utility vehicle that will be available for sale before the end of the decade, the Daimler AG unit said on Sept. 29. A prototype, which is close to the production version of the sporty SUV, was unveiled at the Paris Motor Show and can drive 310 miles on a single charge, compared with as far as 542 km for the Tesla Model X.

“We’re now flipping the switch,” Daimler COE  Dieter Zetsche said. “We’re ready for the launch of an electric product offensive that will cover all vehicle segments, from the compact to the luxury class.”

The strategy, which is backed by plans to invest $1.1 billion in battery technology, is a departure from Mercedes’s previous approach. Up to now, the world’s second-largest luxury-car brand offered an electric offshoot of an existing model by adding a battery pack and electric motor, as Mercedes did with the van-like B-Class. Stand-alone models and a separate nameplate will give Mercedes’s electric vehicles more visibility to better compete with Tesla, in which Daimler was an early investor. 

The turnabout is part of a broader industry shift toward more appealing electric cars as automakers scramble to meet ever-tighter emissions standards. The European Union is seeking efficiency improvements in the next five years that would effectively be double the gains made since 2010. Volkswagen AG, seeking to recover from the emissions scandal, plans to roll out 30 battery-powered vehicles by 2025 and targets sales of as many as 3 million electric cars a year.

Electric Intelligence

EQ, which stands for “electric intelligence,” will offer an array of products and services, including energy storage for homes and charging services, Mercedes said. The move will put pressure on luxury-car rivals BMW and Audi to respond. Most of BMW’s senior executives are skipping the Paris car show to deliberate on their own electric-car initiatives, while Volkswagen, Audi’s parent, unveiled the battery-powered I.D. concept car in Paris.

To be sure, the speed at  which consumers are switching to electric cars is expected to remain tepid at best. Forecaster IHS Markit expects battery-powered vehicles to account for about 3 percent of global car demand in 2025, compared with less than 1 percent this year.

“Manufacturers need to start offering products that meet consumers’ requirements,” said Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany. “It’s clear what sort of driving ranges buyers expect, it’s also clear we need a fast charging network. Prices for these vehicles cannot be significantly higher than for those with combustion engines.”

By Elisabeth Behrmann

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