The German company’s announcement of the ‘Generation EQ’ SUV throws down the gauntlet to Tesla
Mercedes-Benz announced its new all-electric brand at last week’s Paris Motor Show, marking the German manufacturer’s first foray into developing own-brand electric vehicles. The new range of cars – dubbed EQ, or Electric Intelligence – will debut with the ‘Generation EQ’, an SUV featuring two electric motors capable of producing 300 kW of power, and which was unveiled alongside the announcement.
It will also boast a semi-autonomous ‘driver assistance’ feature, similar to the “Autopilot” functions already in use on a number of cars, as well as an impressive wireless induction charging system, which will set it apart from its competitors.
With the move, Mercedes puts itself in direct competition with former beneficiaries Tesla Motors, who despite being relative newcomers to the automotive industry, are already the EV market leaders in the United States. The Chief Executive Officer of Daimler – Mercedes’ parent group – Dieter Zetsche acknowledged Tesla’s impressive lead at the motor show, but confidently announced that his company was aiming to be the EV market leader by 2025, and that by then at least a quarter of Mercedes vehicles would be all-electric – a bold statement indeed.
It is worth noting the gap that Mercedes will have to leap in order to catch up with Tesla. The Generation EQ’s total power output of 300kW is outstripped by Tesla’s Model X SUV, while its real-world range (likely around 250 miles) is roughly the same, and its charge rate is much lower.
Furthermore, Tesla’s upcoming Model 3 has a predicted range 50 miles further than the EQ and will cost only US$35,000, compared with its US$55,000 (according to Bloomberg). The Model 3 is already slated for production late next year, but when asked when he thought the Generation EQ would be available to consumers, Zetsche simply said that it was “close to production.” In reality, consumers will have to wait until 2019.
Is Mercedes Too Confident?
As well as admitting that Tesla are way out in front in the EV market, both technologically and in terms of sales, Zetsche believes that they will maintain this lead for at least another 5 years, in which time CEO Elon Musk already has plans for several more vehicles (including an all-electric ‘Tesla Semi’ truck, which would compete directly with Daimler’s own notable truck range). In that respect, Zetsche’s nebulous 9-year prediction for Mercedes’ EV range seems rather hollow. Tesla also ranks highly in both investor and consumer trust, although that may have something to do with the personality cult surrounding Musk.
However, if you look beyond Tesla’s impressive record and Musk’s fierce ambition, Zetsche’s confidence begins to look much more reasonable. For a start, the Tesla business model is a very risky one indeed, and the majority of their value – and subsequent technological capability – stems from investor confidence and government subsidies, which relies on Tesla selling an unprecedented number of Model 3’s. In other words, Musk has bet the entire company on a single car, whereas Mercedes have a large and stable market beyond EVs. Musk’s temperament and unusual business style have made many investors wary in the past, and if he can’t deliver with the Model 3 next year, their patience might run out.
Whichever way the fortunes of the Model 3 or Generation EQ go, what is clear is that Tesla’s bullish innovation has convinced major automotive companies such as Mercedes, Nissan and Renault that the time is right to start investing in and developing EVs, and even if they are trailing behind Musk’s company for the moment, they may soon be giving him a run for his money.
EDIT: The article incorrectly stated that the EQ’s total power output was 600kW.