Mercedes Puts Tesla Technology Beneath Hood to Chase BMW – Bloomberg

Posted: Monday, November 03, 2014

Mercedes-Benz’s first mainstream
electric car has Tesla technology under the hood, though it’s
not flaunting it.

Unlike Bayerische Motoren Werke AG (BMW), which wrapped its
competing emission-free model in futuristic carbon fiber,
Daimler AG (DAI)’s Mercedes unit put an electric motor and battery
inside its existing van-like B-Class hatchback. The only clues
that it’s electric are a couple of small decals and the blue
trim on the mirrors and front grille.

Teaming up with Tesla Motors Inc. (TSLA) is supposed to help
Mercedes transfer some of the hipster aura of the electric-vehicle pioneer to the B-Class while avoiding the pitfalls of
spending billions on a technology few may want to buy. Whether
it will resonate with the consumers who do want to be part of
the automotive avant-garde is another question.

“The B-Class electric is a low-cost and low-risk solution
for Daimler,” said Stefan Bratzel, director of the Center of
Automotive Management at the University of Applied Sciences in
Bergisch Gladbach, Germany.

Because the electric B-Class shares an assembly line with
the gasoline and diesel versions, Mercedes doesn’t need to sell
a fixed amount of vehicles to cover its costs, Bratzel said.




Source: Daimler AG via Bloomberg

A Mercedes-Benz B-Class electric automobile, produced by Daimler. During the test drive, the white B-Class blended in among other compacts on the island’s windy asphalt roads in Mallorca. Close

A Mercedes-Benz B-Class electric automobile, produced by Daimler. During the test… Read More

Open

Source: Daimler AG via Bloomberg

A Mercedes-Benz B-Class electric automobile, produced by Daimler. During the test drive, the white B-Class blended in among other compacts on the island’s windy asphalt roads in Mallorca.

“You can reasonably say that nobody today is making a
battery-powered vehicle that’s economically viable in its own
right,” Daimler Chief Executive Officer Dieter Zetsche said at
an Oct. 27 event on the Spanish island of Mallorca to present
the electric B-Class to journalists. “Manufacturers will not
see a return within a reasonable time on the billions they’re
investing now.”

Less Effort

Despite the purpose-built design of BMW’s i3, its range,
performance and interior space are very similar to those of the
B-Class, Zetsche said. “But our effort was dramatically
smaller.”

BMW counters that creating a new electric car has
advantages over re-fitting existing models.

“Weight, driveability and range are in ideal
proportions,” said Mathias Schmidt, a spokesman for the Munich-based company.

Consumers will get to decide when the emission-free B-Class
reaches showrooms in Germany on Nov. 29. It comes with a range
of about 200 kilometers, or 124 miles, at prices similar to the
i3, Zetsche said. The BMW car costs about 35,000 euros ($43,766)
in Germany and $41,350 in the U.S, where a version of the
electric B-Class has been available in selected states since
mid-July. A broader rollout is set for next year.




Photographer: Chris Ratcliffe/Bloomberg

“You can reasonably say that nobody today is making a battery-powered vehicle that’s economically viable on its own right,” Daimler Chief Executive Officer Dieter Zetsche said at an event this week on the Spanish island of Mallorca to present the electric B-Class to journalists. Close

“You can reasonably say that nobody today is making a battery-powered vehicle that’s… Read More

Open

Photographer: Chris Ratcliffe/Bloomberg

“You can reasonably say that nobody today is making a battery-powered vehicle that’s economically viable on its own right,” Daimler Chief Executive Officer Dieter Zetsche said at an event this week on the Spanish island of Mallorca to present the electric B-Class to journalists.

Windy Roads

During the test drive, the white B-Class blended in among
other compacts on the island’s windy asphalt roads.

Though the car weighs about 200 kilograms (440 pounds) more
than the conventional gasoline and diesel B-Class because of the
big battery pack, it accelerated swiftly, thanks to the instant
power of the electric motor. It was almost silent, except for an
artificial sound Mercedes added to warn pedestrians at speeds up
to 30 kilometers (19 miles) per hour. The center display
continuously updated the car’s current range, charging level and
energy flow.

The battery and motor come from Palo Alto, California-based
Tesla, led by billionaire Elon Musk. Though Daimler loosened the
relationship last month, selling its 4 percent stake for about
$780 million, it says it will keep the startup as a supplier.

“Tesla’s electric drivetrain fits well to the B-Class,”
said Daniel Schwarz, a Frankfurt-based analyst with Commerzbank.
“It offers a good range and didn’t cause much hassle for
Daimler to adapt.”

For Stuttgart-based Daimler, this is the third battery-powered model after the e-Smart city car and an electric version
of the Mercedes SLS supercar that’s now out of production. It
has the best chance of winning buyers.

Potential Customers

“The B-Class addresses a much larger number of potential
customers” than either of Mercedes’s previous electric models,
said Hans-Peter Wodniok, a Kronberg, Germany-based analyst with
Fairesearch GmbH. “The current attempts by Daimler and BMW are
far more promising than Renault’s Twizy or the Smart,” which
seat only two people. “The B-Class or i3 are serious vehicles
that also look like cars.”

How much of a market either will be able to exploit remains
to be seen. Demand for electric vehicles has been developing
slower than expected as high vehicle prices and fears of being
stranded along the roadside by a dead battery left buyers
hesitating. Renault SA (RNO) Chief Executive Officer Carlos Ghosn,
also head of alliance partner Nissan Motor Co. (7201) and an adamant
proponent of electric vehicles, last year postponed a goal to
sell a combined 1.5 million electric cars by 2016.

Global electric-vehicle production will more than quadruple
to 1.02 million in 2020, according to an estimate by IHS
Automotive. This would still give the models just 1 percent of
the market, compared to the 0.3 percent share predicted for this
year.

Showy BMW

Still, BMW’s riskier strategy might eventually pay off. The
world’s biggest luxury-car maker’s i3 will probably outsell the
electric B-Class two to one in 2020, according to IHS estimates.
And that’s only counting pure battery-powered vehicles. Orders
with an on-board gasoline-powered generator to extend the range
will propel i3 sales to 32,400 compared with 6,400 B-Classes,
according to IHS.

That may be because people who buy electric vehicles
actually want other drivers to notice how environmentally
conscious they are, said Anjan Hemanth Kumar, a Bangalore-based
analyst for Frost & Sullivan Inc.

“For the identity of the customer, it’s very important to
have a proper electric vehicle with a unique identity so they
can differentiate themselves,” Kumar said. “You want to show
off, just as a Ferrari driver wants to show off.”

To contact the reporter on this story:
Dorothee Tschampa in Frankfurt at
dtschampa@bloomberg.net

To contact the editors responsible for this story:
Chris Reiter at
creiter2@bloomberg.net
Naomi Kresge

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