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- On Sunday, Mercedes-Benz unveiled the Concept CLA Class, an electric vehicle built on a new architecture that will underpin the German auto giant’s future battery cars.
- Meanwhile on Saturday, rival BMW showed the “Vision Neue Klasse”, another electric concept car that highlights the company’s EV ambitions.
- European carmakers, who are thought to be behind Chinese companies and Elon Musk’s Tesla, will have to move fast to show they are ready to be major players in the electric age.
BMW unveiled the Vision Neue Klasse electric vehicle at the IAA Motor Show in Munich, Germany. This is the basis of BMW’s larger effort in electric vehicles.
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MUNICH, Germany – BMW and Mercedes are making their biggest push yet on electric cars in a bid to fend off rising competition from Chinese players and catch up with US giant Tesla.
Over the past few days, as part of the IAA Mobility motor show in Munich, Germany, auto giants unveiled electric concept cars and new platforms for their future battery-powered vehicles.
European carmakers, who are thought to be behind Chinese companies such as Warren Buffett-backed BYD and Elon Musk’s Tesla, will have to move fast to show the market they are ready to be major players in the electric age.
On Sunday, Mercedes-Benz unveiled its Concept CLA Class, an electric vehicle built on a new architecture that will underpin the German auto giant’s future battery cars. The company said the concept car has a range of 750 km (466 mi) and is capable of reaching 400 km of range with just 15 minutes of charging.
Mercedes CEO Ola Kallenius talked about the car and described it as a “revolutionary development” for the German company.
“With those efficiency numbers, that kind of range, that kind of fast charging, I don’t know of any vehicle in that category that can match that,” Calanius told CNBC’s Annette Weisbach on Sunday.
On Saturday, rival BMW showed the “Vision New Class,” another electric concept car that highlights the company’s EV ambitions. The Neue Klasse is BMW’s new architecture for its EV. The first vehicle based on this platform is set to enter production in 2025.
“In just two years’ time, these cars will be on the road and with them, overall, we will usher BMW into a new era of innovation and sustainability,” BMW CEO Oliver Zipse told CNBC. That’s the purpose.” Arabile Gumede.
Gypse said BMW is on track to double its EV sales this year. He added that 15% of BMW’s global sales will be battery EVs by the end of 2023.
Mercedes and BMW’s dedicated EV platforms differ from previous architectures where they would adapt combustion engines or hybrid models and add batteries. This is the biggest ever effort by the companies towards a new platform for the electric vehicle era.
Analysts said the announcements by Mercedes and BMW are big steps forward but may still leave them behind Tesla.
New platforms from Mercedes and BMW debut for European OEMs [original equipment manufacturers] would be able to. “These cars are still a year away, but their specifications suggest that European OEMs will be able to make attractive products,” Daniel Rosca, senior research analyst at Bernstein Research, told CNBC via email.
Roeska said these new platforms will “close a big part of the gap” for Tesla and the Chinese players, “but not completely.”
BMW and Mercedes are making headway in an increasingly competitive electric vehicle market largely dominated by Tesla and various Chinese players.
According to Counterpoint Research, Tesla captured a 20% share of the global EV market in the second quarter, followed by BYD at 15%.
And the competition has become more fierce due to the massive price war waged by Tesla. The US automaker began cutting prices in 2023, vowing to sacrifice margins in the short term to gain market share.
Both Mercedes and BMW play in the premium segment of the market, where cars like Tesla’s Model S and Model X compete. As they prepare to release more EVs in the coming years, Mercedes says its focus is not on pushing large volumes.
“We’re not pushing quantity, we’re focusing on value over quantity,” Kallenius said.
Meanwhile, Volkswagen’s strategy appears to be to release cars at different prices to capture different segments of the market.
The company announced on Sunday that it will launch eleven new all-electric models by 2027, underscoring its EV incentives. In 2026, Volkswagen said it plans to launch the ID. 2all, an electric vehicle that will sell for less than 25,000 euros ($26,942).
The German auto giant showed ID. GTI concept electric vehicle at the IAA show, and said a production version of the car is due to hit the road in 2027.
In a world where batteries are powering cars, it is not just the design of the car or the engine that will win over consumers. The importance of technology is increasing.
Counterpoint said in a note last week, “Premium EVs now need to look more akin to smartphones than traditional cars in order to provide an experience similar to Tesla — the gold standard in EVs with its vertically integrated platform.”
Indeed, Tesla has built its business on controlling the hardware – the car – as well as the software that goes inside it. Musk often talks about the company’s Autopilot features that allow the car to perform certain driving features autonomously. Tesla’s large interior screen and apps make it feel like using a smartphone.
Several Chinese automakers, including upstarts Xpeng and Neo, also market their own semi-autonomous driving features.
At the IAA conference, the incumbents are also talking about their technical prowess to show that they too can compete with Tesla and Chinese start-ups.
For example, BMW said its Vision Neue Klasse EV features a heads-up display that displays information on the driver’s windscreen.
BMW CEO Zipse said the Vision New Class represents the “biggest investment” in a car on the “digital side”, which includes semiconductors.
“It’s a completely digital feel to the car,” Zipse said.
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