Growing number of sub-brands could make for quite the moniker
It will wear the three-pointed star, making it a Mercedes-Benz. And it is being developed by AMG, the performance sub-brand. And it will share the Formula 1 hybrid powertrain, making it eligible to be part of the new EQ sub-brand that will denote electric vehicles.
Daimler used the Paris Motor Show to confirm work is underway on the hypercar and also to launch the new EQ brand. Executives aren’t worried about a potentially lengthy moniker, which could include “Mercedes-Benz AMG EQ” and then the name of the supercar.
“We have a good strategy as to which cars will be called EQ and which will keep their existing nomenclature,” said Jens Thiemer, vice president of marketing for Mercedes-Benz Cars group, adding the new sub-brand will not dilute the other brands.
The new hypercar, due in about two years, could be badged EQ and would be quite the halo car, but that decision has not yet been made, Thiemer said.
Daimler is investing in 10 electric vehicles by 2025 for the EQ brand, and they will include a wide range of vehicles, starting in 2019 with the Generation EQ SUV, which was shown as a concept in Paris. The new Smart EVs on display in Paris will not be branded EQ.
Thiemer is excited to launch a new brand and has two years to get it ready for market. The first vehicle, the Generation, was so named because it will usher in a full generation of vehicles for a new generation of buyers. They could be younger buyers or those who could not find the type of vehicle they want in the existing Mercedes-Benz lineup. The Generation will be available to order in Europe in 2018 and in North America in 2019, he said. The concept shown in Paris is close to the production model.
An SUV was chosen as the first concept because it is the most popular segment, said Dieter Zetsche, chairman of Daimler and head of Mercedes-Benz Cars. But the EQ brand will have vehicles in all the volume segments, including sedans and crossovers, as part of the target to be the top of the premium market, including electric vehicles, by 2025. The EQ models will supplement—not replace—existing gasoline-powered models. But vehicles such as the S550e hybrid could be branded as EQ models in the future.
Daimler board member Ola Kallenius does not view Tesla as a main competitor, noting few Mercedes S-Class buyers have gone to Tesla. And Mercedes offers a history of quality and reliability that newcomer Tesla cannot match, Thiemer said. But Thiemer is open to cooperation on using Tesla’s Supercharger network. Daimler also has chargers of its own and home storage. And the automaker will promote development of better intercity infrastructure.
Mercedes buys battery cells but develops its own battery packs. Kallenius said there is no interest in developing or producing cells themselves.
The name EQ denotes emotional intelligence and also electric intelligence, executives say, and the new sub-brand represents a new interpretation of the umbrella Mercedes-Benz brand. EQ’s future vehicles will use existing engineering models and will be manufactured alongside conventional vehicles, so there is the flexibility to change the product mix to meet changing demand, Kallenius said. The brand can incorporate hybrids as well as fully electric vehicles.
But EQ is not just a different powertrain—that would not jump far enough, Zetsche said. Most of the people involved with the brand will be based in Stuttgart, but work is also being done in Silicon Valley and in Berlin. He does not know when the tipping point—when range and charging time and cost prompt customers to decide electric vehicles are a better choice than gasoline engines—will be, but he wants the automaker to be ready when the inevitable mass demand is there. It could be the start of the next decade.
The automaker will have a fuel cell vehicle on the road next year but sees battery electric vehicles as the volume solution until the cost of FCVs comes down and infrastructure is in place. Daimler expects 15–25 percent of its sales will be electric vehicles by 2025, Kallenius said.