Can the Mercedes-Benz EQE Replace EQS?
After seeing the pre-sale price of 530,000-590,000 RMB for the Mercedes-Benz EQE, I remembered a recent statement made by Li Xiang, “the sales prices of mid-size to large SUVs produced by China’s BBA manufacturers will be below 500,000 RMB. Consumers will be the ultimate beneficiaries.” Of course, this is also true for sedans.
Last month, the Mercedes-Benz EQS was discounted up to 190,000 RMB. Of course, the current economic situation is not good, and all luxury cars are on sale, but the EQS has undoubtedly received the largest discount. It is not difficult to see that Mercedes-Benz is in a difficult position, selling only 68 units domestically in May.
Perhaps because the EQS did not perform well in its debut, while expecting better sales for the EQE, it is also worth considering why traditional luxury brand electric cars are not well received in the Chinese market. So, what opportunities does the EQE have after entering the 500,000 RMB market?
Disappearance of “Social Identity”
In the past, people who bought the Mercedes-Benz S-Class were called “big shots”. However, the Mercedes-Benz EQS has not been able to sustain the status of “new era big shots” in the eyes of some people, who feel that it is slightly unworthy.
This is the current state of public opinion, which also reflects the psychology of some luxury car buyers. Luxury cars are luxurious largely because of “social identity”.
Domestic brands cannot replicate the Mercedes-Benz S-Class, so it is difficult to break its high price. However, in the field of electric vehicles, new players have played the card of “building a tall building from a flat ground”, surpassing the traditional automakers’ first-mover advantage in internal combustion engine technology, and creating a solid foundation for electric vehicle production by electrifying cars and depicting their core intelligence.
Why do traditional luxury car brands lose “social identity” when it comes to electric cars? This is the same as the topic we have discussed before: “Why can’t electric cars create a sense of luxury?”
Careful observation of the domestic market will reveal that the mainstream consumption interval for electric vehicles is between 200,000 and 500,000 RMB. Domestic brands are the starting point, while Ideal, XPeng, Tesla, and NIO are the mainstay. Once this ceiling is crossed, sales plummet.
It is not that traditional luxury brand electric cars cannot create a luxury feel, but that their perspective on luxury has been blocked by domestic brands, who have perfectly replicated all the methods they have used for premium pricing and have a price advantage.The luxurious features such as interior design, air suspension, multi-color ambient lighting, high-end audio system, and business-class seats in the rear are now available in self-made brand products within the 300,000 RMB price range. Mercedes-Benz has also tried to redefine luxury by introducing the massive HyperScreen in the Mercedes-Benz EQS. However, using technology to shape luxury is not effective in the Chinese market because the era of intelligence advocates for “technological equality”.
You may notice that no new car manufacturers use intelligent configurations as premium configurations. The reason is that intelligence is the differentiating advantage for new car manufacturers. Losing this competitive edge would mean that their products are no different from traditional cars, making it harder to compete in the already saturated market. Some of their decisions have also implicitly formed the industry’s “values”.
Currently, the three Mercedes-Benz EQE 350 models announced have the same split double screen hardware as the S-class, and the upcoming 500 models will be equipped with the MBUX HyperScreen. Of course, the stronger power experience that comes with the big screen is not enough to drive the premium price.
This decision seems somewhat weak in the Chinese market because, for electric vehicles, power is already inexpensive, and hardware differentiation does not conform to the “value” of Chinese electric vehicle markets.
However, Mercedes-Benz is a global car manufacturer, and the EQ series products are still in the early stages. Therefore, the difference in logic between intelligence and electrification and local car manufacturers is acceptable at this point. Whether or not to abandon the cost-oriented configuration logic due to market characteristics is worth further consideration.
“Value” is not absolute, but relative. That is why the EQE, a relatively more valuable alternative, has appeared.
The price of the Mercedes-Benz EQE is almost half that of the EQS, with a pre-sale price of 530,000 to 590,000 RMB for the EQE 350, and a driving range of up to 752 kilometers.Wait a minute, I think I’ve found something. 50% of the reason why this EQE is “cheap” is because of the contrast with its big brother EQS, and the other half is because it is a domestically-produced Mercedes-Benz vehicle made by Beijing Benz, and also the first pure electric sedan produced in China based on the Mercedes Benz EVA 2.0 platform. Currently, Beijing Benz has realized domestic production of the EQ family of vehicles, including the Mercedes-Benz EQA, EQB, EQC and the first pure electric sedan EQE, also the first domestically produced pure electric vehicle in the middle and large size sedan segment in BBA, sharing the EVA electric vehicle architecture with the Mercedes-Benz EQS.
The EQE is equipped with a 96.1 kWh power battery, with a 13.7 kWh energy consumption per 100 kilometers, and a cruising range of 752 kilometers under CLTC conditions.
With its highly recognizable bow-shaped body, 4969 millimeters in length, a 3120 millimeter wheelbase, maximum 20-inch wheels, illuminated star emblem/walnut veneer, seven exterior color choices, six interior color combinations, and rear legroom (926 millimeters) exceeding that of C-Class and E-Class sedans with standard wheelbases.
In plain terms, this is a model that fully inherits the luxury electric configuration of the EQS, with features such as 10-degree rear-wheel active steering, HEPA efficient filtration system, personalized simulated sound, Burmester sound system, intelligent digital headlights, self-developed battery management system, aerodynamic wheels, and a zero-level interface.
Differentiation is a challenge for modern car companies, as was the case with the recent release of the NIO ES7—no one expected NIO to release another model between the ES8 and ES6, given that the price difference between the latter two is only 100,000 yuan. When the three models are put together, it’s hard to find more differences between them besides size. The same can be said for the similarities and price differences between the EQE and EQS.
In a sense, homogenization of one’s own products is the beginning of internal competition, just as with the release of the NIO ET5, many potential ET7 buyers ended up choosing the ET5 instead. For Mercedes-Benz, however, it may be a good thing, as there is enough room in positioning and pricing differences between the EQS and EQE for this new model to fit in.
Because we believe that the EQE is a successor to the EQS, a psychological phenomenon of “half-price purchase” will occur, just as when the C-Class used the design language of the S-Class, everyone will feel “really good.” Regardless of whether the EQS can justify its price, its value is there, which will also have a positive impact on the EQE, which is extremely similar to it.
The 500,000 EQE is bound to have the strength to fight
Compared with all the competitors, Mercedes-Benz’s core advantage lies in its brand value.
Brand value is not the emotion of “hanging the Mercedes-Benz logo can blindly consume,” but to let consumers understand that when you purchase a product from this brand, you will get the expected experience.
We always say “drive a BMW, ride a Mercedes-Benz.” The product characteristics that a brand has accumulated over a long period are created by the car company’s own focus on a certain area, which cannot be surpassed in the short term by building cars through the supply system. The quality of traditional cars often reflects in the details and is difficult to be reflected in the balance sheet data. EQE’s price overlaps with the “ceiling” of consumer acceptance. With the brand value added, it will enter the shopping list of more people.
For example, as the first pure electric vehicle produced by Beijing Benz based on the Mercedes-Benz EVA 2.0 platform, the Mercedes-Benz EQE jointly developed by China and Germany provides ten exclusive upgraded configurations tailored to the demands of the Chinese market, including:
Rear gentleman function, rear center armrest from EQS, front wireless charging design, sunroof sunshade button adjustment in the rear, comfortable rear headrest, selfie camera, rear soft door panel, front seat rear chrome-plated trim, four-zone automatic air conditioning with air index display (provided by future models to be launched), and rear illuminated door sill plate. The rear seats that have been optimized for the Chinese market create a more comfortable riding experience. The standard front side soundproof glass and the entire-vehicle soundproof package further improve the overall quietness of the vehicle.
In the sub-segment market of pure electric vehicles priced at around 500,000 yuan, the Mercedes-Benz EQE faces some fierce competitors.
When the sales cycle of Tesla Model S is nearing the end and almost discontinued, and when preparing to launch the second-generation product, the new energy vehicles of pure electric priced between 500,000 and 800,000 yuan are all eager to eat the large market left by Tesla Model S.Because there are still BMW iX, Mercedes-Benz EQS, and Porsche Taycan as the electric flagships of their respective brands, while the 500,000 to 800,000 price range below requires both high profitability and a certain degree of sales volume to play a better role in publicity and leadership, gradually changing the traditional impression that BBA cannot produce good electric cars.
Looking at it from another perspective, the relationship and logic between EQE and Mercedes-Benz E-Class are as subtle as the relationship between BMW i3 and 3-series. They are both senior brothers of the same school, and also have a certain degree of price overlap in competitive relationship. At most, there is only a price difference of around 100,000.
However, the brand new domestically produced EQE uses Mercedes-Benz’s latest interior design language, derived from the S-Class, with a 12.3-inch instrument screen and a 12.8-inch central control vertical screen. The double-screen system on the Mercedes-Benz E-Class has been used for seven or eight years and will be upgraded next year. If consumers want to experience the interior of the new generation E-Class W214 one year in advance, then choosing the purely electric EQE means that the interior will not be upgraded for at least seven years, thus establishing its position in the market.
Conclusion
I believe the brand new EQE will change the image of Mercedes-Benz electric cars in the minds of consumers. Before that, the EQC, which tasted the flavor of electric vehicles for the first time, was often criticized for its endurance ability; the subsequent EQA and EQB were too similar to substitutes and faded out of the mainstream consumer market. Now, it seems that the benchmark EQS is only a pioneer product serving a minority of people.
The consumer’s perception of Mercedes-Benz electric cars is disjointed from their perception of Mercedes-Benz traditional fuel cars. There is no doubt that Mercedes-Benz is the king of the fuel car field, but whether everyone recognizes its electrified products is questionable. This needs to be demonstrated through various products.
In other words, EQE is the beginning of Mercedes-Benz’s electrification.
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.