Mercedes-Benz is taking on one of the most complex industry challenges with the rollout of its battery-powered EQA: selling small electric cars without a big profit squeeze. The brand’s first fully electric compact model will hit European showrooms this spring, flanking the mid-size EQC sport-utility vehicle and the EQV van, the Daimler AG unit said Wednesday. Prices in Germany start at 47,541 euros ($57,734) and the vehicle offers 486 kilometers (302 miles) of range.
Unlike Tesla Inc.’s Model 3 or Volkswagen AG’s ID.3, the EQA is based on technology from an existing combustion-engine car, which is also available as plug-in hybrid. The German manufacturer modified the underpinnings of its GLA crossover to reduce upfront investment and save time compared to building an all-electric vehicle from scratch. It’s a trade-off that often comes at the expense of driving distance and production-cost efficiencies.
The EQA is based on technology from an existing combustion-engine car.
Source: Daimler AG
The first generation of Mercedes’s lower-priced electric cars likely will drag on profitability until the company develops EV-specific underpinnings and battery prices drop further, said Michael Dean, a Bloomberg Intelligence analyst. Still, the company’s mass-market EV push will help it meet emissions rules in Europe and China, he said.
While the first Mercedes based on dedicated EV technology — the electric sibling of the full-size S-Class sedan — will be introduced later this year, a separate platform that will make producing small and mid-size battery-powered models more efficient is roughly four years away.
The world’s biggest luxury-car maker has little time to waste when it comes to bolstering its EV offerings. Surging demand for plug-in hybrids helped Daimler meet Europe’s CO2 targets in 2020, but it’s unclear how long subsidies for vehicles relying partially on combustion engines will last.
Rival Factory
Elon Musk has signaled Tesla might add production of a hatchback for Europe to the planned Model Y output at its factory under construction near Berlin, which would further up the pressure on domestic manufacturers.