Mercedes EQS sales fall ahead of petrol-loyal buyers

The transition to an electric vehicle is starting to raise some doubts. Sales of this type of technology have begun to stagnate, and it remains to be seen how far they can go in the short to medium term. The luxury segment is no exception, and where there seemed to be a lot of room for growth, Mercedes had a lot of growing pains.

Your Mercedes EQS is a good example.

Goals. For years, European policies have been pushing people to switch to electric vehicles. The goal of ending the sale of internal combustion engine (carbon neutral) cars in 2035 is a great goal, but along the way the European Union has set an ambitious halfway point in 2030 with unprecedented emissions reductions with Fit55.

At the same time, the United States is also developing a plan to phase out fossil fuel-powered vehicles. It also encourages manufacturers to produce their cars locally through tax incentives and tariffs.

What can we say about China: When Europe and the United States wanted to unite (pun intended), the Asian country was years ahead of them, with total production far exceeding any other market and tight control over raw materials.

Reality. The truth is that electric vehicle sales have responded. Gradually, this type of technology began to spread outside of China, and sales doubled and tripled until, for example, the Tesla Model Y became the best-selling car in the world.

But we are also seeing a slowdown in sales. One that makes sense. Once manufacturers have satisfied the desires of their wealthiest customers (to whom they sold their first electric cars), it remains to be seen whether they will be able to penetrate the mid- and lower-mid segments with cars that will convince the general public.

This has led to a decline in demand that is being felt across all sectors. Now the question is, will the electric car become popular with a horizon full of promises of better and cheaper batteries? Experts like Guillermo García Alfonsín have called this into question in the short term, and we are beginning to understand whether a new glass ceiling exists.

The Mercedes case. The same thing happened to Mercedes as to many other European brands. Pressure from Europe and their sales in China have led to early announcements of a future electric surge in the medium term. Mercedes has proposed this for 2030. Now he questions that.

The company is not the only one collecting cables. Volkswagen Group, another major conglomerate that has taken on electric vehicles, is starting to look favorably on plug-in hybrids as an intermediate step. BMW is also not achieving expected results. These are just some examples.

And the EQS case. Mercedes, like many other companies, has entered the electric vehicle space starting from the roof down. Realizing that selling an electric car would cost them a very significant premium, one of the first cars to feature this technology was the Mercedes EQS, an all-electric variant of their executive sedan.

The car was sold as a turning point within the brand, as its most advanced car in decades and as the ultimate example of its technology, with a new design language both outside (bulging shapes a far cry from the more classic Mercedes S-Class) and inside (with its hypnotic hyperscreen).

Clients explain in Bloomberg They didn’t finish answering. In 2021, the first copies arrived and 2,500 cars were put on the market. In 2022, the car’s first calendar year on the market, 23,400 units were sold. But while the car should have continued to grow, 2023 was a fateful year: a 40% drop left the model at 14,100 units.

Economic reasons. The situation with the Mercedes EQS tells us a lot about the state of the electric vehicle market. The economic newspaper collects some purely economic reasons explaining the situation and reasons for concern for Mercedes.

They assure Bloomberg that the price war in China has caused great damage to the electric car, which sells for more than 100,000 euros in Europe, and that Mercedes is resisting lowering the price in Asia. In addition, there are large discounts on car rentals in the United States, which is an interesting option for those who only need a car occasionally due to image criteria.

In addition, the car has some problems that we pointed out during its test. This is a high energy consumption car with a huge battery that urgently needs a higher power charge to significantly reduce charging time. This is what much of the industry is betting on.

Client Perception. The second thing that the article in the economic media talks about is the buyer’s perception of the Mercedes EQS. It mentions that last year the Mercedes S Class sold six times more than the electric model, with its more classic and traditional styling. They note that new forms of electricity may have alienated a very immobile clientele.

We discussed the same thing in the BMW i7 test as an added value. While Mercedes decided to offer an electric car adapted to the requirements of technology (for example, a very good aerodynamic coefficient), BMW decided to offer the same cars as the 7 Series, with its boxy and angular shapes, despite the fact that it is poor decision in terms of efficiency.

Whether Mercedes neglected rear passengers with the new EQS is another question. One thing to consider is that a significant portion of this car’s buyers don’t drive one, and while BMW’s luxury sedan is very focused on offering the best of the best (including a huge screen), Mercedes hasn’t made the car that comfortable or comfortable. is fun in the back seats, just like the S-Class. These are genuine Chinese shoes in a market like China where they are given great value.

Electric car and luxury. Another hurdle that electric vehicles face is the luxury segment. Just a few days ago, the CEO of Rimac, a brand that has produced only one exclusive electric supercar, blamed political decisions for the fact that his car didn’t sell. He believes that political “pressure” to switch to an electric car is causing reluctance and that, as a reaction, more and more potential buyers are choosing to avoid buying one.

This, which cannot be measured in numbers, may be true, but two other points must also be taken into account. First, if the overall market moves towards electric vehicles, the value added in the luxury market will be the internal combustion engine. This is something Porsche or Ferrari know well.

The second point is that cars like the Mercedes S Class are bought partly knowing that they depreciate much less than other cars. The electric car, as a technology that is rapidly developing, gradually improving autonomy and has great promise on the horizon, is not selling on the secondary market as much as we would like. The product has depreciated more than other technologies and this is another problem to add to the Mercedes EQS.

Image | Mercedes

In Hatak | An electric car loses 50% of its value three years after purchase. Although it may not seem like it, it is a good sign.