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Mercedes' electric SUV set to rattle Tesla's cage

This is the page on Mercedes-Benz' Norwegian website that invites you to pre-order an EQC by putting down a deposit of 20 019 krone.

This is the page on Mercedes-Benz' Norwegian website that invites you to pre-order an EQC by putting down a deposit of 20 019 krone.

Published Sep 4, 2018


Stockholm, Sweden - Mercedes-Benz is set to unveil its much-anticipated electric SUV on Tuesday, marking the start of a German onslaught against Tesla's dominance of the fast-growing market for premium battery cars.

Mercedes-Benz, BMW, Audi and Porsche are all gunning for the $52 billion (R780 billion) Californian upstart, with early publicity efforts emulating its tech-industry halo. The market for upscale electric cars is Tesla's to lose, with sales of its entry-level Model 3 sedan expected to reach about 50 000 in 2018 and almost double that in 2019.

The Mercedes EQC - whose launch programme in Stockholm features yoga in a direct appeal to the Millennials who have flocked to Tesla - is the first production model under the carmaker's electric EQ sub-brand. It will be closely followed by similarly hyped debuts for BMW and Audi.

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IHS Markit automotive powertrain analyst Wajih Hossenally said: "While Tesla currently has a strong hold on the luxury electric market, I don't think this will be the case after the arrival of the German premium offerings. Right now Tesla has virtually zero competition - but that will change from 2019 onwards."

The new Mercedes, due to reach its first customers in 2019, will be priced close to the fuel-burning GLC to compete in the same bracket as Tesla's $49 000 (R784 000) Model 3, helped by its hotter-selling SUV form. An affordable Model Y SUV is slated to join Tesla's high-end Model X crossover and Model S car, but not before 2020-21.

Tech Buzz

The EQC softens its higher-riding proportions with sporty curves and a distinctive full-width rear light, while the interior resembles that of the Mercedes C-Class - a reminder of economies of scale that electric-only Tesla cannot match.

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Well aware that their earlier battery-car offerings have failed to get anything like Tesla's level of public attention, the German brands are doggedly courting Silicon Valley-style buzz for the coming product blitz. Executives - including Mercedes boss Dieter Zetsche - have taken to appearing in jeans and sneakers, responding to a broader tech-industry incursion into areas such as autonomous driving and connected services.

When it came to the EQC launch, Mercedes picked the city of Stockholm for its startup scene and green credentials, then began firing off teasers on Instagram and Twitter. Like Tesla, Mercedes is announcing EQC orders in Norway even before its price. It has already taken more than 2000 refundable deposits of 20 000 krone (R35 700) each in Europe's biggest electric-car market, where Tesla sold 8500 vehicles in 2017.

The launch is the centrepiece of a three-day event that features DJ sets and yoga with a YouTube star - almost literally bending over backwards to telegraph 21st-century kudos.

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Audi on Monday began production of its e-Tron SUV ahead of its 17 September market launch jamboree in San Francisco, just 65 kilometres from Tesla's Fremont assembly plant. It also plans to begin taking reservations backed by refundable $1000 (R15 000) deposits. The e-Tron is due in showrooms early next year, followed in 2020 by two more electric Audis and the Porsche Taycan sports car from its Volkswagen Group stablemate.

Wow factor

Not to be outdone, BMW has hired a Lufthansa cargo jet to fly its electric Vision iNext - still just a concept car - from Munich to Beijing via New York and, of course, San Francisco. Events are planned in all four cities over five days. In another Tesla-inspired move, the three German carmakers are developing their own network of fast-chargers along major highways in a partnership with Ford.

While some experts doubt the Germans can ever match the wow factor around Tesla and its founding boss Elon Musk, many also wonder whether they need to.

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Cologne-based McKinsey partner Nikolai Mueller said: "German manufacturers have highly desirable, fun-to-drive premium cars in their DNA - that's a very good starting point."

Tesla used its powerful tech aura to persuade early adopters to pay a premium for an all-electric car from a relative unknown, with no quality track-record or physical dealerships for servicing and support. But the German carmakers have a century of manufacturing behind them, with sterling brands, well developed global sales networks and an existing customer base in the millions.

BMW's i3 mini and an earlier Audi e-Tron failed to shift large volumes, but the electric-car market has matured since. One big question is whether competitors can offer a viable alternative to Tesla's proprietary fast-charging network.


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