The trend of electrification has arrived, how does Mercedes-Benz BMW turn around?

Author | Li Jinglin

In the era of new energy, Tesla and Wei Xiaoli are out of the limelight, while old traditional car companies such as Mercedes-Benz, BMW, and Audi have some starlight, and there is a sense of "the front wave is photographed on the beach".

However, in the face of the tempting "new world", the old giants are not reconciled. Just half a month ago, the BBA (Mercedes-Benz, BMW, Audi) successively released new pure electric models. On April 19, Mercedes-Benz and Audi released new cars on the same day, Mercedes-Benz EQS pure electric SUV world premiere, which is the third model developed by Mercedes-Benz based on the positive development of pure electric platform, Audi released the concept model urbansphere; the next day, BMW BMW i7 was launched in Beijing worldwide, which is the fifth pure electric product of BMW Group.

"[The Mercedes-Benz EQS SUV] redefines the large luxury pure electric SUV segment." "The unveiling of the BMW i7 means that BMW's lineup of all-electric products has expanded into the large luxury car segment." "[The Audi urbansphere concept car] demonstrates Audi's vision for high-end mobility in Chinese cities in the future."

Whether it is executive declarations or media evaluations, it seems to prove the determination of veteran car companies to recover lost ground. The BBA, which once stood at the top of the pyramid in the era of fuel vehicles, is trying to complete the "elephant turn" to seize the luxury electric vehicle market through this collective show of muscles.

The initial battle was unfavorable

In the stage of industry transformation, past achievements are easy to become the burden of the present, compared with the "barefoot is not afraid to wear shoes" of the new forces, it is difficult for the giants to put up a broken posture to meet the battle, and there will always be caution and compromise behind the balance.

The first battle of the BBA's electrification began in 2019.

At that time, Tesla was already an absolute leader in the new energy market. A Model 3 became the world's top electric model seller for two consecutive years, and it was one of the few models that could sell more than 100,000 units a year. For the whole of 2019, Tesla delivered a total of 367,500 vehicles worldwide. With the localization of the Model 3 in the year, Tesla completely opened up the Chinese market with a more people-friendly image - Tesla China insured 45,372 vehicles in 2019, of which the Model 3 reached 33,903.

In the face of Tesla, which is almost riding the dust, the BBA that has returned to the gods can be described as late. In 2019, Mercedes-Benz listed a domestic version of the pure electric vehicle EQC, Audi's pure electric product e-tron also achieved a domestic listing in China, BMW was the latest, and only opened the pre-sale of the iX3 in China in September 2020.

Mercedes-Benz EQC, BMW iX3, Audi e-tron, although carrying the sign of the first electric model of the three giants, but more or less can find the shadow of the once flagship fuel model in them.

BMW iX3 | Source: BMW Weibo

BMW iX3 and BMW X3 belong to the same platform development products, the former and the fuel car BMW X3 still have a lot in common. At that time, some evaluation posts mentioned that "not completely out of the design category of fuel vehicles, the traditional grille shape still exists, which is not pure enough for new energy vehicles", "Because it is not a pure electric platform, the bulge of its rear central platform is very obvious".

Platform is crucial for a car company. Based on the platform, car companies can create different levels of models in a relatively short period of time, realize the matrix and scale of products, and at the same time greatly reduce the cost of car companies. For enterprises producing electric vehicle models, the material cost of the independent platform of electric vehicles is relatively low, and its expansion and interior space also have better performance. However, the cost of building a pure electric platform is huge, which is one of the reasons why traditional car companies still need to use the fuel vehicle platform.

The path dependence on the platform obviously restricted the choice of veteran car companies in the early stage. Mercedes-Benz EQC comes from the MEA electric drive platform, the MEA platform at that time can not be called a pure electric exclusive platform in the strict sense, but based on the Mercedes-Benz GLC platform transformation; the birth of the Audi e-tron MLB Evo platform, but also in the production of Audi Q5, Q7.

Mercedes-Benz EQC | Source: Mercedes-Benz Weibo

The first step in BBA's electrification transformation has invariably chosen a similar path to produce electric vehicles by transforming the fuel vehicle platform. This "oil to electricity" choice after weighing the cost input reflects the difficulty of the transformation of traditional car companies to a certain extent - they cannot completely ignore the profit cycle like the new forces to launch new products, but pay more attention to commercial needs. BMW's senior management in charge of research and development has also admitted that it is too expensive and too long to completely abandon the technology and platform of fuel vehicles and to develop and build electric vehicle production lines from scratch. This also makes BBA's three electric vehicles more like a transition product from fuel to electric.

"The products created by the 'oil to electricity' and the pure electricity platform are not the same, and the competitiveness of oil to electricity will be insufficient, so a new pure electric platform is still needed." A sentence by Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers, has become a true portrayal of the BBA's first electric vehicle.

According to Sohu Auto data, in 2021, Mercedes-Benz EQC sold only 6098 vehicles, such data, even less than Weilai's monthly sales. After entering 2022, sales in the first three months were only 447, 337 and 263 units, respectively. Audi e-tron sales are even worse, only 3815 vehicles sold in 2021, and last December or even a single month sales were not more than 100, only 66.

Relatively good performance is bmw IX3, according to the 42nd garage data, in the new energy SUV MPV ranking, BBA three only BMW IX3 barely squeezed into the top 20 monthly sales. In 2021, a total of 44,243 units of this model were sold.

Audi e-tron | Source: Audi China Weibo

The overall failure of the first electric model is due to the fact that "fuel car thinking" is the biggest obstacle restricting BBA.

Today, the problem of "oil to electricity" has not been completely solved. On March 31 this year, the BMW Group unveiled its new BWM i3 product. The new car is still based on BMW's CLAR modular platform developed in 2014, which now covers almost all of BMW's business lines, including fuel vehicles, hybrid models and pure electric models - "the CLAR platform is still the DNA architecture of fuel vehicles in its bones", auto media person Li Zhuowei once said.

The competitive disadvantage of oil to electricity is now obvious, relying on the transformation of the fuel vehicle platform, the pure electric model produced can not change the original body structure, but only the replacement of the power system, or the upgrade of the detail level, these conditions are far from enough for the increasingly demanding new energy vehicle consumers. Of course, BMW and Mercedes-Benz have long been aware of this problem, but it will take time for the elephant to turn around, and the two giant companies have also set the time point for the full realization of pure electric platform research and development in 2025.

The delay in technology research and development is largely due to the backwardness of ideas. At a time when new car manufacturers are desperately pursuing extreme performance and improving range, BBA engineers are still trying to achieve a driving experience similar to that of electric vehicles and fuel vehicles. As everyone knows, most consumers who choose to buy electric vehicles are in order to experience a different driving experience from fuel vehicles, "Unless I am crazy, why buy an old scooter of nearly 500,000 yuan, and the driving experience of driving is no different from that of oil trucks." "The choice of the BBA can be described as the opposite.

When referring to the market prospects of the aforementioned BMW i3, Li Zhuowei said unceremoniously: "In the era of electric vehicles, the driver assistance system, the fluency and ease of use of the vehicle system, the service level of the entire brand, etc. are the hard power of the new forces of car manufacturing, BMW's car-making concept is still stuck in the era of fuel vehicles, it can be said that BMW has fallen behind in the era of electric vehicles." ”

Under the new consumption trend, it is not easy to keep up with the times, not to mention the visible fall behind.

From Li Zhuowei's words, it can be further seen that the brand aura on the BBA has been fully dissipated for the attractiveness of electric vehicle consumers. In the past, car consumption was a status symbol, and even between the same brand models, a hierarchical chain of contempt was formed, which is why the traditional BBA will be convinced of its brand value: consumers will always see the brand first, and then pay attention to the specific details.

However, the consumption standards of the younger generation have long changed, and the trendy, scientific and technological sense and even more in line with the appearance of young aesthetics are the important basis for their consumption choices.

The BBA has come a time when it has to change.

The elephant turns

As for how to change, the road in front of BBA is actually very clear, and full electrification is imperative.

At the macro blueprint level, Mercedes-Benz has planned a path of full electrification with 2025 and 2030 as the time node. In July last year, Mercedes-Benz upgraded the original "electric first" strategy to "all-electric", and the strategy was clear. According to the plan, by 2025, Mercedes-Benz will achieve a sales share of 50% of new energy vehicles, in order to prepare for the full electric power in 2030.

Mercedes-Benz EQS | Source: Mercedes-Benz Weibo

According to Mercedes-Benz's 2021 financial report, they delivered 2.4 million new vehicles during the reporting period, which means that they will sell more than 1 million new energy vehicles in three years. For an old car company with a history of more than 100 years, such a transformation is not insignificant. To achieve full electrification, Mercedes-Benz plans to invest more than 40 billion euros by 2030.

The goal is clear, Mercedes-Benz will focus on the research and development of pure electric platform. At the inaugural ESG Forum in 2021, Mercedes-Benz announced that by 2025 it will release three pure electric model architecture platforms, namely MB.EA, a medium- and large-sized passenger car platform, AMG.EA, an exclusive platform for high-performance electric models, and VAN.EA, an exclusive platform for pure electric MPV and light commercial vehicles. All new energy models launched by Mercedes-Benz in the future will come from these three platforms.

Christoph Stadzinski, vice president of architecture and electric drive development of large-scale pure electric models of Mercedes-Benz Group AG, said in an interview with domestic media: "In the electric vehicle track, Mercedes-Benz's biggest differentiator may lie in the AMG.EA high-performance pure electric platform. ”

However, there are still three years to go before the launch of the pure electric platform, and in order to cope with this time difference, Mercedes-Benz will launch an MMA platform designed for compact and mid-size cars, which will follow the existing "electric first" principle and also produce fuel vehicles. According to this rhythm, perhaps mercedes-benz still need to continue to dormant, waiting for the accumulation of thick hair.

In addition, Mercedes-Benz has also increased its research and development efforts on the power battery, another core component of electric vehicles. At present, Mercedes-Benz has laid out 9 battery factories in 7 cities in Germany, China, the United States, Thailand and other countries, with an investment amount of more than 1 billion euros. According to the plan, Mercedes-Benz will be equipped with lithium iron phosphate batteries for mass production models, which are highly secure, stable and inexpensive, and can reduce battery costs when put into use.

BMW and Mercedes chose a similar target rhythm.

BMW i7 | Source: BMW Weibo

Previously, BMW introduced the current electrification process at the earnings call: in 2022, the mass production and trial production of pure electric vehicle models will reach 15; the "new generation" model based on the new structure will start trial production in 2024; by the end of 2025, the BMW Group plans to deliver 2 million pure electric vehicles worldwide.

Also in 2030, BMW plans to complete the process of full electrification. By then, they plan to deliver a total of 10 million pure electric vehicles to the market.

However, the biggest problem in BMW's overall situation is the overall backwardness of technology. The core indicator of electric vehicles is the mileage, the newly released BMW i3 mileage is only 526 kilometers, in the same price point, Model 3 Performance can reach 700 kilometers, Xiaopeng P7 mileage can also exceed 600 kilometers.

In addition, BMW's people-vehicle interaction, on-board intelligent system and supporting charging piles are also lagging behind in an all-round way. As of February 2022, BMW's instant charging dynamic link in the Chinese market has 380,000 public charging piles, but this data does not have BMW's own layout of the charging system, as long as bmw's available public charging piles are counted.

As a luxury car brand, if the technical capabilities and supporting services cannot keep up, it is easy to be abandoned by consumers. The pressure in front of BMW can be imagined.

Another giant, Audi, has also unveiled its plans for full electrification. But compared to Mercedes and BMW, Audi also left itself with air. Dusman, chairman of the Audi Automotive Management Board, said at the Berlin Climate Conference last year that Audi's last brand new fuel model will be put into production within four years, and that from 2026, Audi's new models will be fully switched to pure electric products; in 2033, Audi plans to gradually stop the production of internal combustion engines.

Audi urbansphere concept car | source: Audi China Weibo

The only exception is the Chinese market. According to Audi's judgment, there is still a demand for fuel vehicles in the Chinese market, and they will continue to produce and sell fuel vehicles in China after 2033.

Either radically determined, or leaving room for maneuver, the road to full electrification of the BBA has begun. However, in the face of the rapidly changing market, whether the 3-8 year transition period is too long, and what the market structure will be like at that time, is the risk left to the BBA.

In contrast, the electrification process of Chinese car companies is much faster. In April this year, BYD Automobile issued a notice announcing that it would stop the production of fuel vehicles and would focus on pure electric and plug-in hybrid business. They also became the world's first company to stop the fire. Although BYD's choice is still a case, it is difficult to fully represent the industry trend, but it can be seen that the same traditional fuel vehicle companies have indeed found a rapid transformation path.

According to research by consultancy PwC, traditional automakers' share of profits in the global automotive industry could fall from 85 percent to less than 50 percent by 2030. In the face of market changes, the leaders of many multinational car companies have mentioned that in the future, they will focus on new technologies such as electric vehicles, which has become a source of profit for automobile companies.

Looking back at the BBA, the biggest problem in front of them is the tail difficulty. The advantages they have established in the era of fuel vehicles have inevitably become the burden of transformation and upheaval. Fortunately, the three car companies have unique advantages in terms of capital and market, which will also become the most important weight of their transformation.