Mercedes and the Knife Fight That’s Coming to the Luxury EV Market

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After a pioneer blazes a trail, copycats follow, hoping to reap the same riches. So it is in the nascent electric vehicles industry, which is crowded with ultra-luxury models hoping to replicate Tesla's success with the expensive Roadster. But one automaker's foray into the top end is not imitation, because it can claim to have invented the luxury automobile. That would be Mercedes-Benz. This week, we speak with Mercedes' chief technology officer, Markus Schäfer, about the company's return to its roots, its coming high-concentration silicon battery, and a promotion called "desire."

In the late 1800s, three German engineers—Gottlieb Daimler, Wilhelm Maybach and Karl Benz—created small, powerful internal combustion engines, fit them into carriages made for horses, climbed in and tooled around with friends and family. The nascent automobile industry was evolving fast, and they were leading the way. By the turn of the century, these men had utterly transformed their almost haphazard contraptions into motor vehicles that many considered the finest anywhere. The very rich coveted the immaculate cars featuring their careful handiwork, paying $7,500 and more for them—equal to about $225,000 in today's prices.

Now the industry is jettisoning combustion for electric motors and batteries, and Mercedes-Benz, the modern successor to the German trio’s respective companies, is attempting to recapture its past as a way to thrive in the turbulent transition: In those early decades, the Germans wholly ignored Henry Ford and his cheap everyman’s car, the Model T, even though it sold in the millions. Instead they continued to cater to the luxury market. While Mercedes began building less-expensive compact models in search of greater sales more than a decade ago, those days will soon be over as the company firmly returns to its luxury roots. By 2030, Mercedes plans to be selling mostly premium electric vehicles like its current electric EQS sedan, which costs as much as $145,000 with the trimmings, and its 2023 electric Maybach SUV, which looks likely to sell for more than $200,000. Critics have lavished praise on the EQS for its styling, aerodynamic engineering and opulent comfort, although some have suggested that Mercedes tried a little bit too hard in the cockpit, with a wall-to-wall 56-inch display that they contend is massively overpacked with gizmos.

But it’s not overdone if you consider how the EV market has shaped up, with much of the industry piling into the high-priced ultra-luxury end of it in apparent hopes of replicating Tesla’s route to success, from the expensive Roadster to the more affordable Model 3. Besides Mercedes, the other would-be replicants include Lucid Motors, BMW, Porsche, Rivian and Maserati. I asked Markus Schäfer, Mercedes’ chief technology officer, whether it was a gamble to bet on such a crowded space for what will be a brutal battle. He said he wasn’t intimidated in the least. “That’s our home field,” he said. “That’s where we came from. This is the history of this company for 130 years. We were always at the pinnacle of the automobile.”