In the fall of 2020, Mercedes announced its electric strategy and targets ambitious sales targets for electric cars that have not been achieved. Where did Mercedes go wrong and why did Mercedes sell 50% fewer electric cars than BMW in 2024?
Mercedes’ target of selling 50% of production electric models in 2025 and 100% electric models in 2030 where market conditions permit was not met. Where did Mercedes go wrong and why is BMW far outperforming?
In the fall of 2020, Mercedes was unusually optimistic about the future of electric mobility. But the German automaker made some major mistakes and unfortunately, they seem to continue to the present day.
1. Too few and too expensive electric models
Mercedes chose to develop the EQA and EQB electric versions on the conventional MFAII platform but spent a fortune to develop the EVA platform for the EQE/EQS/EQE SUV/EQS SUV. The 400V EVA platform quickly became obsolete technologically and the Mercedes EQE/EQS luxury electric Mercedes EQE/EQS models have lower charging powers than the Hyundai Ioniq 5 or Kia EV5 which cost 2-3 times less.
In today’s electric age, the premium is no longer just about premium materials, but also high charging power. Plus, the very high prices of the EQE and EQS and their SUV derivatives have led to very poor sales. Moreover, Mercedes offered no electric models in the segments where the Tesla Model Y and Model 3 have become the world’s best-selling electric models. And nor will a model appear in this segment before the summer of 2026.
Instead, BMW has decided to offer an electric model in every relevant market segment. Except for the iX, developed on a partially dedicated electric platform, the rest of the models are built on
conventional platforms. See i4, i5, i5 Touring, iX3, i7, iX1, iX2. By using conventional platforms, BMW has been able to offer competitive prices and cover every relevant market segment.
BMW won with its “technology open” strategy offering all forms of powertrains in one model and letting the customer decide what they want to buy. Mercedes has no electric equivalent for the C-Class and GLC.
2. Too many platforms, lack of standardized batteries
Mercedes decided to build several dedicated electric platforms or “Electric First”: EVA for the EQE/EQS, MMA multi-propulsion platform for the compact range, MB.EA Medium and Large and AMG.EA. for AMG models. MB.EA large version of the MB.EA platform was canceled in the meantime and Mercedes has decided to modernize the existing EVA architecture for the future EQE/EQS.
By comparison, BMW will have a single platform, the Neue Klasse, for all models from 1 Series to X7, including the M models.
The Neue Klasse platform has a single battery cell with the same diameter and two different heights. BMW uses cylindrical cells which allows for better cooling and a more compact design. The cells are mounted in series according to the cell-to-pack principle. This is theoretically a disadvantage because if one cell fails, the whole battery has to be replaced. However, BMW found that in the current generation of electric models, the cell failure rate was less than 10%, with problems occurring in the battery control unit, which has numerous cables connecting the modules in which the battery cells are grouped in parallel. By mounting the cells in series BMW has eliminated all the cables from the battery control unit.
BMW has only Li-ion batteries, with the same battery chemistry and cobalt content less than 10%.
Mercedes has kept the prismatic cells grouped in modules in both the EQE/EQS EVA platform and the new MMA.
In addition, Mercedes made the mistake of offering two different chemistries for the MMA platform batteries. Why the mistake? The new Mercedes CLA will have a basic lithium-iron-phosphate battery and a
higher-capacity Li-ion battery. Mercedes chose the lithium-iron-phosphate solution for the basic battery because it’s cheaper. However, two battery chemistries for the same model are a huge logistical complication. Besides, Mercedes cannot estimate demand for the base and top models. If demand for lithium-iron-phosphate batteries is low, the investment will never pay off and the advantage of a cheaper battery cell no longer exists.
On the other hand, the Li-iron-phosphate battery is 30% heavier at the same stored energy capacity than a Li-ion battery. Therefore, such a battery is not suitable for a premium model.
That’s why Joachim Post, a member of the BMW board of directors and Benedetto Vigna, head of Ferrari, said that such a battery does not fit well with premium or high-performance cars.
Also, the price advantage of a lithium-iron-phosphate cell is lost compared to a standardized battery, which can be obtained at reduced prices if produced in large quantities.
3. Rare earth-free engines, simpler gearboxes
BMW is continuing its policy of offering externally current-excited synchronous motors instead of the rare-earth-dependent permanent-magnet synchronous motors chosen by Mercedes.
BMW has chosen to achieve better dynamic performance on Neue Klasse models by using very high-revving electric motors instead of a two-speed gearbox like the Porsche Taycan and Mercedes CLA. With an electric motor whose rotor reaches up to 18,000 rpm compared to 12-13,000 in the Porsche, BMW no longer needs a two-speed gearbox.
4. As many components in-house as possible
In the electric age, technology is changing much faster than internal combustion engines. That’s why BMW has decided to produce all major components in-house, to modernize them more quickly, and to have very strict quality control.
So, BMW only buys battery cells from various suppliers but builds the battery itself. BMW also manufactures the electric motors and the battery control unit in-house, so it basically has control over the most important components of an electric car.