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Daimler CEO Zetsche: EQ brand to enter China on a locally-produced basis

Dr. Dieter Zetsche stands next to the Generation EQ Concept at the start of Paris Motor Show on September 29.

PARIS – The new EQ brand dedicated to electric mobility that Mercedes-Benz launched at this year’s Paris Motor Show will eventually make its way into China on a locally-produced basis, according to Dr. Dieter Zetsche, chairman of the board of management of Daimler AG and head of Mercedes-Benz Cars.

“It’s very simple that our objective is to see China as one of our primary markets to – on a local production basis – offer these future EVs,” Zetsche told CBU/CAR in an interview on September 29 on the sidelines of the biennial show, underscoring the importance of China as the world’s largest auto and EV markets. “For non-Chinese manufacturers it’s not a consideration to address that market on an imported basis.”

Daimler’s strategy for electrification in China for the brand of Mercedes-Benz has been limited to hybrids and plug-in hybrids on an imported basis but with the EQ, it will be extended to full-fledged battery electric vehicles, according to Zetsche. The Denza EV brand that Daimler and Chinese partner BYD has created, on the other hand, is becoming more competitive. “Denza has made significant contributions and gave us significant amount of learning which is very valuable,” said Zetsche.

The Generation EQ Concept has a 70 kWh battery system, two electric motors offering a system output of up to 300 kW and range of up to 500 km.

The EQ brand’s Generation EQ Concept unveiled at the show is a representative of a family of 10 new EVs that will be launched by Mercedes-Benz by 2025, when EVs will make up about 15-25 percent of Mercedes-Benz global sales, according to Zetsche. The EQ brand will be supported by an e-mobility strategy CASE – Connected, Autonomous, Shared and Electric – what Zestche calls the four pillars for the transformation of the car product into an ultimate platform. The first car from the EQ brand will be out on the road within three years at the price range of a reasonably equipped Mercedes GLC.

Asked why Mercedes-Benz chose the Paris Motor Show to launch the EQ brand and e-mobility strategy, Zetsche pointed out that the performance and cost of an EV are coming to a crossing point and a tipping point for demand is coming.

“We do believe ultimately the future success of electric cars will simply depend on the competitiveness of our end products,” said Zetsche. “Regulations, incentives and infrastructure all have an impact but ultimately the decisive factor is the choice of the customer in favor of one or another technology.”

He believes that performance wise, with higher ranges and shorter charging times, EVs are coming close to that competitiveness, while on the economics side the cost of electric drivetrains is coming down fast.

“When we put these elements together, we do believe that within our planning period we will see this tipping point based on customer demand. We thought internally we have to shift gears. We have to assume that within the next cycle we will see EV demand go from the niche to mass market,” said Zetsche. “Timing is important in this regard and that’s why we choose to now present our plans in a physical way with the Concept and to talk about our strategy internally to allocate resources, reallocate resources and add resources to go successfully in this direction.”

The EQ brand will have an all-electric vehicle architecture which will address the main volume segments between the sedans and SUVs in a variety of different all-electric vehicles being derived from this architecture standalone, according to Zetsche, but Mercedes-Benz will offer all electric vehicles within its compact segment which will be more correlated to the existing combustion or future combustion engine car line than the other segments.

Zetsche stressed, however, that the EQ brand simply represents a widening of the field rather than a move from one field to another. The fact that Mercedes-Benz world premiered the AMG GT Roadster the night before on the performance side in sharp contrast to EVs is a testament. “All of them in combination will decide the future success of the company,” said Zetsche. “We will see AMG cars tomorrow perhaps not autonomous in the first place, but with some electric components like the hyper car we announced, fully connected and we see electric cars which might set new standards as far as acceleration is concerned. All that is blended by the additional set of dimensions which are open which ultimately will create new benefits to the customers.”

Zetsche has also set a new challenge for Mercedes-Benz: lead the premium car segment in electric cars by 2025 at the latest, now that it is close to winning the global luxury vehicle sales crown this year. Asked why Mercedes-Benz is able to achieve that target four years ahead of time, Zetsche simply attributed the success of the Mercedes-Benz brand, especially in China, to products that better understand local consumers, styling, product portfolio, a board member exclusively responsible for China, working closely with partners and a strategy that creates demand then define supply based on that demand.

The good news just keeps coming: Mercedes-Benz delivered an all-time monthly record of 211,286 vehicles globally in September, the first time sales in a single month have ever crossed 200,000 units. January-September sales in China rose 29.5 percent to 344,791 units, nearly the same number achieved in all of 2015, boosting global sales to nearly 1.54 million units for a 11.7 percent growth.

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