Lescow, the former Vice President of Global Sales of smart, once said:
Thanks to the SEA architecture, the length of a car is no longer the determining factor. We are redefining smart, and it will become more high-end in the future, instead of just fun.
Smart Elf #1 is the first SUV in the family and will be available in the Chinese market in 2022, with exports to Europe at the same time.
Let’s first take a look at the details of the parameters of Smart Elf #1:
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Based on the Geely SEA platform, designed as a small SUV;
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Equipped with features such as seat heating, lane change warning, and head-up display;
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Rear permanent magnet synchronous motor, peak power of 200 kW, peak torque of 343 N·m, and 0-100 km/h acceleration in 6.7 seconds;
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Equipped with a 66 kWh ternary lithium battery pack, with a maximum range of 560 km on the CLTC condition;
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Supports 7.2 kW AC slow charging, 100 kW DC fast charging, and 150 kW DC supercharging, and can complete a 5-80% charging in under 30 minutes;
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The vehicle size is 4,270 x 1,822 x 1,636 mm, with a wheelbase of 2,750 mm, equipped with 19-inch wheels, and 235/45 R19 tires;
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The front trunk has a capacity of 15L, and the rear trunk capacity (with second-row seats in 4/6 split and slidable/flat-foldable) is 323-411/986L;
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Equipped with a 12.8-inch suspended center control screen, with a resolution of 1,920 x 1,080, and car system hardware with 12G operating memory and 128G storage space, as well as a 9.2-inch full HD LCD instrument panel;
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Smart Pilot intelligent driving assistance system supports: adaptive cruise control (ACC), lane-keeping assistance (LKA), blind-spot monitoring system (BSD), traffic congestion assistance (TJA), automatic parking assistance (APA), and adaptive near/far beam adjustment.
On January 8, 2019, Zhejiang Geely Holding Group and Mercedes-Benz announced that they would jointly invest approximately RMB 5.4 billion to establish the global joint venture company smart Automobile Co., Ltd. Geely and Mercedes-Benz each hold 50% of the shares, with Mercedes-Benz primarily acquiring corresponding shares in the form of smart brand investment.
The smart brand, with Geely’s engineering background, is a bit awkward in Mercedes-Benz’s pure electric vehicle products. More directly, is Smart Elf #1 at odds with EQA, or are they brothers in arms facing two different markets without any entanglement? Are they products of the same level or distinct product categories? Whose pricing power weighs more heavily for Smart Elf #1, Mercedes-Benz or Geely?## Who is in charge?
Joint venture companies are responsible for engineering research and development, while product design is the responsibility of Mercedes-Benz. This cooperation model has a similar precedent – in 2010, Mercedes-Benz and BYD each held 50% of the shares and established the TANK brand, with products under “Mercedes-Benz styling and BYD mature electric technology”. In 2021, BYD and Mercedes-Benz signed an agreement on the transfer of shares in the TANK structure. After the transfer is completed, BYD and Daimler will hold 90% and 10% of the shares of TANK, respectively. The agreement is expected to be completed by mid-2022.
TANK’s current sales and services rely on Mercedes-Benz’s retail system, and TANK X is even placed directly in Mercedes-Benz showrooms, with after-sales maintenance also being the responsibility of Mercedes-Benz. However, after TANK’s corporate equity structure changed, BYD fully established the TANK Automotive Sales and Service Company, which may mean that TANK’s automotive sales network will leave the Mercedes-Benz sales system and stand on its own.
In addition to Geely and Mercedes-Benz each holding half of the equity structure, let’s take a look at the management of smart’s company:
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Global CEO: Tong Xiangbei, joined Geely Automobile in 2015, responsible for overall business operations related to the smart brand, including sales, marketing, research and development, production and after-sales services;
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Vice President of Sales, Marketing and After-Sales: Zhang Mingxia, joined Mercedes-Benz in 2000, responsible for global sales, marketing and after-sales business of the smart brand, and served as Chairman of the Supervisory Board of Smart Europe Ltd.;
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CFO: Ulf Nestler, who once worked in Beijing Benz Automotive Co., Ltd. and Daimler Greater China Investment Co., Ltd., is responsible for company finance management and leads all finance-related business;
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Vice President of Research and Development: Yang Jun, since 2014, Mr. Yang Jun has been the Deputy Dean of Geely Automotive Research Institute, responsible for the R&D and operations of the smart brand’s new models.
Smart’s board of directors has 3 seats each for Geely and Mercedes-Benz.
“Design Department” and “Brand Contribution” are reliable partners?
It has to be said that Mercedes-Benz really has a set of interior design skills. The same rose gold decorative panel and light-colored seats create a different atmosphere on the Smart Fortwo Cabrio #1 compared to Mercedes-Benz’s own product style, conveying a lively, friendly, relaxed and natural feel – soft curves and smooth surfaces are the essence of Mercedes-Benz interiors.
As a power source, the electric motor can bring significant improvements to at least the performance level of a vehicle, especially in terms of power performance. If I want four-wheel drive, I’ll add a motor, and if I want to accelerate faster, I’ll pile on more motor power. The driving mode and acceleration time are the two most intuitive performance indicators. However, in front of an electric vehicle, a highly integrated electric drive unit can be flexibly arranged on the front and rear axles, and the acceleration time of 0-100 km/h within 7 seconds is becoming increasingly common. Although the evaluation criteria for design are subjective, luxury car manufacturers such as Mercedes-Benz have accumulated a good reputation in the market and possess a mature and highly accepted design language, which is an innate advantage that distinguishes them from emerging brands.
The multi-brand strategy brings to mind a hidden giant in daily household products, Unilever, which owns over 400 brands. Often times, consumers carefully select products on the shelves, just like wandering around in a local Unilever store. Although the automotive industry cannot be compared to the household products industry, there are similar examples: the Volkswagen Group owns Volkswagen, Audi, and Porsche brands, and BMW Group has Rolls-Royce, MINI, and BMW. Geely Group has Lotus, Volvo, Polestar, Lynk & Co, Proton, and Geely, and so on.
The premise of “more children means more fighting” is that numerous products form a precise array targeting different market segments. Although smart FE #1 is positioned as a small SUV, Mercedes-Benz also has its own compact SUV – EQA which is also pure electric. The EQA 300 4MATIC, which was first launched in the domestic market, has the following basic parameters:
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Dual-motor all-wheel drive, rated power of 168 kW, rated torque of 390 N·m, acceleration from 0 to 100 km/h in 7.7 seconds, and a maximum speed of 160 km/h.
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Vehicle dimension of 4,463 x 1,834 x 1,624 mm and a wheelbase of 2,729 mm.
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Equipped with a 73.5 kWh lithium-ion battery pack, 10-80% DC fast charging time of 45 minutes, and a driving range of 537 km according to CLTC test cycle.
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Optional package of Berliner surround sound stereo and 360° intelligent parking system for CNY 12,000.
The suggested retail price for EQA 4MATIC First Edition is CNY 365,800. The core parameters and functions of smart FE #1 and EQA 4MATIC First Edition are in a back-and-forth comparison. Considering Smart’s ownership structure, Smart FE #1 is also Smart’s first attempt at small-sized SUV. Its previous unique position in the Mercedes-Benz system has changed. The target customers of pure electric Smart may overlap with Mercedes-Benz’s pure electric models in recent years. In this context, how Mercedes-Benz will handle the product planning, pricing and sales channels of its entry-level EQ series and Smart’s products is of great interest.
Does the collaborative development between brands mean “double kitchen delight”? A car is difficult to grow into “the mole on the heart” effect. You may crave the sleek design of the new Mazda 3 two-door, but regret that it doesn’t have a pure electric powertrain; or the Tesla Model 3, with its flowing and simple design, cannot have the restrained and implicit interior of the Polestar 2. Joint ventures and collaboration in product development between different brands can bring more unique and interesting products to the market, not just to meet the requirements of the majority of consumers, or to achieve mediocrity, but also to bring some distinctive characters to the automotive market.Unfortunately, it’s unlikely that a joint effort with standout features like the smart sprite #1 will be the main force for manufacturers to conquer the entire home electric vehicle market – at least for now. Smart sprite #1 is destined to specialize in a certain niche, which makes it difficult to talk about the advantages of scale brought by costs. At the same time, considering the relationship between smart sprite #1 and the Mercedes EQ series, this unique model is destined to be a “King Xie Tangqianyan”, and is unlikely to be priced below RMB 300,000.
In conclusion
Geely’s description of the Sea Horizon platform is a powerful and interface-rich motherboard: it not only performs well within Geely Group, but also maintains an open attitude towards cooperation with other manufacturers on the SEA platform.
In early 2021, Geely successively reached cooperation agreements with Baidu, Foxconn, Tencent, and Faraday Future. Among them, the cooperation with Baidu, Foxconn, and Faraday Future mainly revolved around contract manufacturing. Geely also formed a joint venture company with Foxconn, with each holding a 50% stake, to provide contract manufacturing and custom consulting services to global automobile and travel companies, including but not limited to the entire industry chain and process of automobile vehicles or parts, intelligent control systems, automobile ecosystems, and electric vehicles.
On February 18th, 2021, Baidu CEO Robin Li stated in a conference call that the intelligent electric vehicle company established jointly with Geely has identified its CEO and brand name, and will launch a new model within three years.
Geely’s layout based on the SEA platform seems somewhat similar to the “ODM model” in the mobile phone industry: Original Design Manufacturer (ODM) is responsible for designing several public samples for end customers to choose from. ODM contract manufacturers control the dominant supply volume, and end customers only need to provide suggestions and design requirements.
Extensive authorized cooperation can indeed play a role in scaling and reducing platform costs. However, considering Geely’s control over engineering, traditional car companies are unlikely to choose to bind the fundamental aspects of their products to the SEA platform. Instead, companies that have entered the automotive industry from the Internet are actively participating in this cooperative model. In the future, the automotive market will not be like the mobile phone industry, where “core parameter hardware configuration” and the evolution and development of electronic and electrical architecture ensure that the differences between brands are very huge – the automotive industry, especially in smart cars, is still a rich and varied ocean of unique capabilities.
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This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.