Author: Doyourjun
Mercedes-Benz is leading the charge in the luxury camp towards an electrified future.
Looking back at 2022, amidst challenges such as chip shortages, limited supply chains and uncertain pandemic conditions, Mercedes-Benz delivered a total of 751,714 new cars, a YoY growth of 143% for new energy vehicle sales, including pure electric and plug-in hybrid vehicles. Looking ahead to 2023, Mercedes will introduce six new pure electric vehicle and plug-in hybrid models to the Chinese market, forming a 17-vehicle new energy product matrix that covers the “new generation of luxury, core luxury, and high-end luxury” segments. As it drives towards a “dual-path of oil-electricity, luxury for use” transition path, Mercedes-Benz shows its commitment.
The electrification transformation is a war without gunpowder smoke. In this war, the old luxury brand name from Stuttgart, with its advantage in fuel-powered vehicle sales, has achieved a breakthrough by doubling its new energy vehicle sales. This is a rare feat for luxury brands.
Will 2023 be a breakthrough year, or a turning point year, for high-end electric vehicles?
As the economy slows down and retail prices rise inevitably, what will the trends be for car consumption in 2023? The China Passenger Car Association predicts that “the car market in 2023 may experience zero growth, but we are optimistic about the share of new energy vehicles.” Another prediction from China Association of Automobile Manufacturers reinforces this judgement, stating that “in 2023, sales of new energy vehicles will reach 9 million, which is a 35% YoY growth.” The market share of fuel-powered vehicles is under pressure, while new energy vehicles still have considerable room for growth at both ends of the spectrum. The phenomenon of consumer upgrading to high-end luxury new energy vehicles is becoming more apparent month by month. In November last year, new energy vehicles priced between 300,000 and 400,000 yuan accounted for 5% of total sales, and those above 400,000 yuan accounted for 3.8%.
Lin Cheng, Chief scientist of State Engineering Laboratory, made a more radical prediction that the new energy vehicle market will continue to grow in 2023, especially for high-end electric vehicles.
Where is Mercedes-Benz starting from?
It is no surprise that Mercedes-Benz did not participate in the 2022 Guangzhou Auto Show. After all, this year’s auto show transitioned from “delayed” to “restored” status so hastily. Especially for those German companies known for their rigorous planning, it was difficult to adjust their new product promotion plans and pace in such short notice.
However, it was bound to happen.
At the 2023 CES exhibition opened on January 5, 2023, with the theme of “Technology creates aspirations”, Mercedes-Benz once again released a new electrification strategy information, which is another effort after accelerating the “comprehensive electrification” transformation strategy in 2021.
Speed changes the competition logic. Mercedes-Benz’s electrification strategy is “only fast, not broken”.
Promoting the commercialization speed of building high-power charging networks worldwide, releasing intelligent lane change and navigation assistance driving functions, and having the DRIVE PILOT driving navigation system with L3 level automatic driving function, creating an immersive 360-degree music experience with Apple Music and Universal Music Group, launching in-car digital entertainment experience with ZYNC, partnering with the trendy brand SUPERPLASTIC to create a brand new character “Superdackel”… Mercedes-Benz is making significant progress in creating new luxury sensory experiences in the era of electrification.
Are luxury electric cars priced the same as gasoline cars?
In November of last year, the average transaction price of Mercedes-Benz brand vehicles was around 460,000 yuan.
Prior to this, Mercedes-Benz’s electric vehicles launched a relatively significant price counterattack in November. The three flagship luxury electric vehicles EQE, EQS, and AMG EQS 53 shocked the industry with lightning price adjustments, with the highest price adjustment of 230,000 yuan. After the price adjustment, the starting price of EQS is 100,000 yuan lower than the price of the S-class gasoline vehicle.
This move is well intentioned.After experiencing soaring upstream raw material prices and chip crises, the prices of domestic new energy vehicles have begun to fluctuate instead of continuously increasing. As a luxury giant, Mercedes-Benz has chosen to adjust prices first, driving a major industry event- luxury cars’ oil-to-electricity parity, which is not impossible.
With this, traditional car companies have launched a fierce counterattack against new forces in the new energy market, entering the white-hot stage.
Electrification strategy, BBA go their own way
In the electric transformation, who among BBA can lead the way? In 2022, Mercedes-Benz will release dozens of new car models. Mercedes-Benz is improving its electric vehicle product line at the fastest speed, while BMW and Audi are still growing in a meticulous mode. “Fully-electric” Mercedes-Benz stepped on the gas and built two R&D centers from Beijing to Shanghai within a few months.
Technology serves, customers come first.
Regarding in-depth understanding of Chinese customers’ needs, in the past, it may be just customizing a long-wheelbase model, while in the future, it may redefine software and technology-based experience adaptation inside the car. 40 billion euros is the research and development scale for Mercedes-Benz’s pure electric vehicle models before 2030 to accelerate the (car) maker’s early arrival at the turning point of the electric vehicle race.
Mercedes-Benz’s electrification strategy has clear logic and a tight pace. Starting in 2021, Mercedes-Benz accelerated its electrification transition from EV-first to EV-only. In 2022, Mercedes-Benz launched eight pure electric and plug-in hybrid models in the Chinese market. In 2023, Mercedes-Benz will continue to redefine gradual luxury and continue to supplement the EQ series with new models. In 2024, Mercedes-Benz will launch a brand-new modular MMA architecture platform designed for compact cars. By 2025, Mercedes-Benz will release three pure electric vehicle architecture platforms, namely MB.EA, AMG.EA, and VAN.EA.“`
From sitting in a Mercedes-Benz to driving one, the EQ product line is built on a naturally pure electric EVA platform with the evolutionary capability of electronic and electrical architectures, and takes a product philosophy of “a Mercedes-Benz made specifically for drivers who enjoy driving”.
What is the outlook for Mercedes-Benz EQ?
In creating a sense of luxury, Mercedes-Benz’s pure electric EQ series stands out from other ordinary electric vehicles with its distinctive design that is far removed from the simple and technological style. This makes it difficult for other competitors to reach.
Cultivating user habits takes time.
In the high-end luxury car market in China, German BBA automakers hold a 75% market share. At present, the main driving force for the luxury pure electric vehicle market is the increased demand from luxury car owners. In the future, the growth of the EQ series may still be driven by fuel car owners, who highly recognize Mercedes-Benz’s brand style and quality, and are more likely to prioritize EQ products when they have a demand for electric cars.
Doraemon’s words:
What should a luxury pure electric sedan look like?
The maximum value of a Mercedes-Benz electric vehicle lies not in a single product feature, but in the ingenious combination of multiple elements, which includes emotional experience, high technology, and luxury quality. Mercedes-Benz has been pursuing excellence in digitalization, smart connectivity, and self-developed electric drive systems to advance its electric vehicle offerings. With the new pure electric EQE as a milestone, Mercedes-Benz is rapidly entering its era of rational prosperity with a clear product strategy and EVA electric platform.
In 2023, it will still be Mercedes-Benz’s “new” era.
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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.