On Sunday, Mercedes-Benz revealed the Concept CLA Class, a new electric vehicle based on an architecture created to serve the brand as it transitions to battery cars. BMW countered the next day with a showing of their own,"Vision Neue Klasse," a concept car that emphasizes their stakes in the EV market.European businesses, seen to be trailing behind Chinese competitors and Tesla, have hastened to demonstrate their preparedness to be foremost competitors in the electric age.
At the IAA Mobility motor show in Munich, BMW and Mercedes are launching their biggest foray into electric cars yet in a bid to stay ahead of competition from Chinese players and catch up to US rival Tesla. The German carmakers respectively revealed electric concept cars and platforms for their future electric vehicles. European car producers, which have been seen as lagging behind Chinese firms like BYD, backed by Warren Buffett, and Tesla, run by Elon Musk, have been forced to act swiftly to demonstrate their readiness to become major players in the electric industry. Mercedes-Benz showcased the Concept CLA Class, a battery-powered car built on a new architecture that will serve as the basis for their future battery-powered automobiles. The vehicle is said to have a range of 750 kilometers (466 miles) and can reach a range of 400 kilometers with 15 minutes of charging. Mercedes CEO Ola Kallenius praised the car, calling it a "revolutionary development" for the German firm. He told CNBC's Annette Weisbach on Sunday that "with those efficiency numbers, that kind of range, that kind of fast charging, I am not aware of any vehicle, in that class that can match that."
BMW presented the "Vision Neue Klasse," their new concept car, to rival the electric vehicle (EV) landscape. This electric platform, known as the Neue Klasse, will enter production by 2025 and will mark the brand's entry into a new era of innovation and sustainability. BMW CEO Oliver Zipse shared that the company intends to double its EV sales this year and 15% of their global sales will be battery EVs by 2023. While Mercedes and BMW have committed to creating dedicated EV platforms, analysts have stated that they may still be left trailing behind Tesla.
Daniel Roeska from Bernstein Research commented to CNBC via email that the platforms presented by Mercedes and BMW are demonstrating, for the first time, what European OEMs will be able to produce. These cars are expected to arrive in a year's time; however, its features suggest that European OEMs will be able to make attractive models. Roeska added that these platforms will reduce the gap between Tesla and the Chinese competitors, but not completely.
BMW and Mercedes are wading their way into the increasingly competitive electric vehicle market, where Tesla holds a dominant 20% of the global market share, followed by 15% from BYD, according to Counterpoint Research. There has been a massive price war, started by Tesla, as they cut their prices back in 2023 in an effort to gain more of the market. Mercedes and BMW have stayed in the premium section of the market, where they compete with Tesla's Model S and Model X. Mercedes has made it clear that they aren't focused on pushing large volumes, as Kallenius put it, they are "focusing on value over volume."
Volkswagen has unveiled its strategy of releasing cars at a variety of prices, in order to target various segments of the market. Sunday, they declared the launch of eleven fresh all-electric models by the year 2027, highlighting their move towards EVs. During 2026, they announced the coming of the ID.2all--an electric automobile selling for below 25,000 euros ($26,942). At the IAA show, the German auto titan presented off the ID.GTI Concept electric car, with a production edition planned to start rolling out in 2027.
In today's world where batteries are powering cars, design and engine aren't the only factors that can sway customers. Technology is increasingly prevalent. Last week, Counterpoint commented that premium EVs need to be like smartphones to be on par with Tesla which serves as the exemplar in the EV industry. Tesla has a controlling grip on both the hardware of the car and the software inside it, as pushed by Musk with the Autopilot features for autonomous driving. Its expansive internal screen and related apps contribute to a smartphone-like experience. Other Chinese automakers like Xpeng and Nio have highlighted semi-autonomous driving capabilities. At the IAA conference, reigning EV players are advertising their technology abilities to show that they can be on par with Tesla as well as Chinese newcomers. BMW spoke of the Vision Neue Klasse EV and its head-up display projecting information on the driver's windscreen, while Zipse, BMW's CEO, commented on its "digital side" consisting of semiconductors which gives it a "completely digital feeling".
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