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Mercedes approaches Tesla in new $12B plan

By HUB SmartCoverage Team on September 4th, 2018

Mercedes-Benz seems to have a Tesla-sized chip on their shoulder.

The world’s largest luxury carmaker has its sights on battery-powered vehicles and will be rolling out its first series of cars meant to target Tesla Inc., according to Bloomberg.

The Mercedes EQC crossover will begin its production schedule in the first half of 2019. As Daimler AG CEO Dieter Zetsche premiered the EQC in Stockholm, he mentioned the vehicle is to be included in its plan to develop a range of offerings from its “EQ electric line”.

The plan from Mercedes-Benz is to “invest 10 billion euros ($12 billion) on the project, but the spending has become ‘more than that,’ Zetsche said Tuesday.

Other makes and models that have begun to put pressure on Tesla include the “Porche Taycan, Audi E-tron and Jaguar I-Pace.” Tesla’s own brand struggles and its production of the Model 3 have made this competition more accessible to other car brands.

Mercedes intends to assemble the EQC model at its Bremen factory in Germany where they also make their C-Class sedan – a best seller.

“Including the Smart brand, which will abandon combustion engines in coming years, Daimler plans to offer 10 fully electric cars by 2022. To underscore the shift, Mercedes will spend 1 billion euros on battery production to create a network of eight facilities globally.”

After Tesla successfully attracted wealthy customers with its Model S vehicles, other luxury brands like Mercedes have begun attempts to tap the electric vehicle market. Diamler, Mercedes’ parent company, expects the demand for battery-powered cars to “eat into sales of more profitable conventional cars rather than lure new customers.”

Daimler shares have not been performing well, and after its Tuesday announcement, shares fell 2% to bring its year to a decline of 24% so far.

Establishing its line of electric vehicles would “help Daimler move beyond concerns over its diesel vehicles.”

Previously, Germany’s Transport regulator forced them to recall nearly one million cars over “allegations that they were equipped with questionable software that made them pollute more on the road than during test results.”

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