•Invest over $30b in Electric Vehicles

By Theodore Opara

German auto makers are taking advantage of the recent European Union high tariff on Chinese made Electric Vehicles to expand and increase their investment in China.

Some of the German auto giants taking this bold step include Mercedes Benz, Volkwagen, and BMW. All together, the three companies have invested over 31 billion USD in their operation in China and are planning more investments in the nearest future.

A breakdown of the investment shows that Mercedes-Benz and BMW are leading with more than 14 billion USD each, while Volkwagen had invested 2.7billion already. While BMW is investing an additional 2.8 billion USD in its Shenyang production base bringing its total investment in the plant to 14.7 billion USD, Mercedes has invested 14 billion USD in China between 2014 and 2023.

According to Mercedes, 1.4 billion USD of the total amount will be used in research and development in the last five years.

Earlier this month, Mercedes Benz Group announced their intention to invest more than $2 billion with local partners to expand its production lineup in China.

Starting from 2025, Mercedes will begin production of the China-exclusive all-electric long-wheelbase CLA model, long-wheelbase GLE and new luxury electric MPV base on the VAN  EA platform.

Ola Kallenius, Chairman of Board of Management of Mercedes of Mercedes-Benz Group on his fourth China visit this year said: “The Chinese market is one of the key pillars of Mercedes-Benz Groups global strategy and is a major driving force behind our transition to electrification and technological innovation”. Adding that Mercedes-Benz remains committed to long-term investment in China, deeply engaging in and contributing to the upgrading of the Chinese automotive industry.”  Mercedes-Benz will be allocating 1.4 billion USD to passenger vehicle operations, while more than 550 million USD will be invested in light commercial vehicles. These new domestically produced models will be manufactured by existing Mercedes joint ventures, Beijing Benz (joint venture with BAIC) and Fujian Benz.

Beijing Benz will begin producing new models on the MMA (Mercedes-Benz Modular Architecture) platform next year. The first local model produced will likely be the new all-electric long-wheelbase CLA. It features an efficient 800-volt platform with an energy conversion rate of 93% from battery to wheels. The model can achieve 400 km of range after 15 minutes of charge. Its energy efficiency reaches 12 kWh per 100 km.

Another key focus of this investment is the local research and production of the China-exclusive GLE SUV. Previously, the best-selling imported model in the Middle Kingdom, the new China-made GLE, will be the first model developed by the Mercedes’s Chinese R&D team. The new model will focus on rear-seat comfort and intelligent technologies tailored for the Chinese market. 

The localised CLA and GLE will further enrich Mercedes’ lineup of locally produced models. Mercedes launched its first China-exclusive model, the long-wheelbase E-Class, in 2010. And its first locally produced SUV, the GLK-Class, in 2011. The company has gradually expanded its local production since 2019, with a total of 11 locally produced models, including six SUVs. 

The commercial part of the investment will support Fujian Benz in producing a new luxury electric MPV based on the VAN.EA platform. All future medium and large light commercial vehicles will be built on the modular and scalable VAN. EA electric platform. Currently, the main light commercial vehicle models for Mercedes in China are the V-Class MPVs.

Fujian Benz was established in June 2007 as Mercedes’ light commercial vehicle production base building V-Class vehicles. The JV is one of the largest industrial companies in Fuzhou, the capital of Fujian. It counts Mercedes and BAIC as its two largest shareholders. In June of this year, Fujian Benz began laying the foundation for the production of VAN.EA platforms in Fuzhou.

Mercedes also informed of its new MB.OS operating system, which will debut with the new local models. The system will feature a new virtual assistant as well as an “end-to-end” smart driving system. “End-to-end” smart driving is common terminology used by local manufacturers to describe their automated driving solutions that Mercedes has begun to adopt.