BMW took the wraps of the Vision Neue Klasse electric vehicle on the IAA motor show in Munich, Germany. It underpins BMW’s big push into electric vehicles.
BMW
MUNICH, Germany — BMW and Mercedes are making their biggest push yet into electric cars in a bid to fend off rising competition from Chinese players and meet up with U.S. giant Tesla.
In the previous few days, as a part of the IAA Mobility motor show in Munich, Germany, the auto giants took the wraps off electric concept cars and latest platforms for his or her future battery-powered vehicles.
European carmakers, which have been perceived to be behind Chinese firms like Warren Buffett-backed BYD and Elon Musk’s Tesla, have had to maneuver quickly to indicate the market they’re able to be major players in the electrical era.
On Sunday, Mercedes-Benz unveiled its Concept CLA Class, an electrical vehicle built on a latest architecture that may underpin future battery cars from the German auto giant. The corporate said the concept automobile has a spread of 750 kilometers (466 miles) in addition to a capability to achieve a spread of 400 kilometers with just quarter-hour of charging.
Mercedes CEO Ola Kallenius talked up the automobile, calling it a “revolutionary development” for the German firm.
“With those efficiency numbers, that sort of range, that sort of fast charging, I’m not aware of any vehicle, in that class that may match that,” Kallenius told CNBC’s Annette Weisbach on Sunday.
On Saturday, rival BMW showed off the “Vision Neue Klasse,” one other electric concept automobile that highlights the corporate’s EV ambitions. Neue Klasse is BMW’s latest architecture for its EVs. The primary vehicles based on this platform are set to enter production in 2025.
“In just two years’ time, these cars will hit the road and with that, overall, we lead BMW to a latest era of innovation and sustainability. That is the purpose of our show here on the IAA,” BMW CEO Oliver Zipse told CNBC’s Arabile Gumede.
Zipse said BMW goes to double its EV sales this yr. By the tip of 2023, 15% of BMW’s global sales will probably be battery EVs, he added.
Mercedes and BMW’s dedicated EV platforms are a departure from previous architecture where they’d adapt combustion engine or hybrid models and add batteries. That is the businesses’ biggest push yet toward a latest platform for the electrical vehicle era.
Analysts said that Mercedes and BMW’s announcements are big steps but might leave them still lagging behind Tesla.
“The brand new platforms at Mercedes and BMW showcase, for the primary time, what the European OEMs [original equipment manufacturers] will probably be able to. These cars are likely still a yr away, but their specifications show that European OEMs will have the ability to create compelling products,” Daniel Roeska, senior research analyst at Bernstein Research, told CNBC via email.
Roeska said that these latest platforms “will close a big portion of the gap” to Tesla and the Chinese players, “but not all the best way.”
Price cutting war in focus
BMW and Mercedes are wading further into an increasingly competitive electric vehicle market, broadly dominated by Tesla and various Chinese players.
Tesla commanded 20% of the worldwide EV market within the second quarter, followed by 15% for BYD, in line with Counterpoint Research.
And the competition has change into more fierce due to a price competition largely sparked by Tesla. The U.S. automaker began cutting prices in 2023, vowing to sacrifice margins within the short term for market share gain.
Mercedes and BMW each play within 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 approaching years, Mercedes maintains its focus is just not on pushing large volumes.
“We should not pushing volume, we’re specializing in value over volume,” Kallenius said.
Meanwhile, Volkswagen’s strategy appears to be to release cars at various prices to capture different segments of the market.
The corporate announced Sunday that it’ll launch eleven latest all-electric models by 2027, underscoring its EV push. In 2026, Volkswagen said it plans to launch the ID. 2all, an electrical vehicle that may sell for lower than 25,000 euros ($26,942).
The German auto giant showed off the ID. GTI Concept electric vehicle on the IAA show, and said a production version of the automobile is scheduled to hit the road in 2027.
Tesla, China dominate with tech in focus
In a world where batteries are powering cars, it is not just design of the automobile or the engine that’s going to win over consumers. Technology is increasingly necessary.
“Premium EVs now must resemble smartphones greater than traditional cars to supply the same experience to Tesla – the gold standard in EVs with its vertically integrated platform,” Counterpoint said in a note last week.
Indeed, Tesla has built its business on controlling the hardware – the automobile itself – in addition to the software that goes inside it. Musk often talks up the corporate’s Autopilot features which permit the automobile to perform some driving features autonomously. Tesla’s large internal screen and apps make it feel more akin to using a smartphone.
Most of the Chinese automakers including upstarts Xpeng and Nio also market their semi-autonomous driving features.
On the IAA conference, incumbents have also been talking up their tech prowess in a bid to indicate they can also match Tesla and the Chinese start-ups.
For instance, BMW said its Vision Neue Klasse EV has a heads-up display that projects information on the driving force’s windscreen.
BMW CEO Zipse said that the Vision Neue Klass represents the “largest investment” in a automobile on the “digital side,” which incorporates semiconductors.
“It is a completely digital feeling to the automobile,” Zipse said.