Electric cars

[Vratenza]

https://www.bloomberg.com/opinion/articles/2024-05-16/why-mercedes-electric-eqs-sedan-flopped

Why Mercedes’ $100,000 Electric Jellybean Flopped

The German automaker’s limousine customers care as much about comfort and status as saving the planet. Now they should worry about residual values too.

May 16, 2024 at 12:00 PM GMT+8

When Mercedes-Benz Group AG unveiled a luxury electric sedan called the EQS in 2021 managers boasted about the radical aerodynamic design, billing it as the German automaker’s most significant launch in decades. Film director James Cameron and singer Alicia Keys were on hand to add their own superlatives for a vehicle that cost in excess of $100,000.

Three years later, the electric version of the flagship S-Class risks becoming one of the biggest flops in Mercedes’ storied history, and its shortcomings have contributed to the company’s decision to ditch a goal of selling only electric vehicles by 2030.

The German automaker’s stumble shows the dangers premium carmakers face as they try to take on Tesla Inc. and persuade their conservative clientele to get a plug. It also underscores the need to better protect EV resale values.

False Start

Sales of Mercedes' EQS electric sedan declined 40% last year

Source: Mercedes-Benz annual reports

Note: 2022 was the first full year of sales

Capacious S-Class limousines have chauffeured political and business leaders for decades, and are especially popular with Chinese elites. However, Mercedes opted for a less boxy design for the EQS, which was built on technical underpinnings developed specifically for EVs. Not only would the curved silhouette — which the company immodestly compared to a bullet train and critics dubbed a jellybean — reduce air resistance and thus boost efficiency and driving range, the EQS would also be clearly distinguishable from vehicles that have a combustion engine. Mercedes even sacrificed the traditional standing three-point star on the hood, instead integrating the badge into a sleek black radiator panel.

In hindsight, these were poor design choices. Mercedes’s pampered clientele aren’t as bothered about driving range and aerodynamics as they are about opulence and having sufficient room to relax in the back seats, which critics say the coupe-like rear fails to provide.

And notwithstanding some impressive electronics — the front “hyperscreen” spans the entire width of the dashboard — I tend to agree that the car doesn’t look as stately as the regular S-Class.

Sales of the luxury electric sedan declined 40% to just 14,100 units last year, according to Mercedes’ annual report. Price cuts in China and heavily discounted US lease deals failed to revive demand while undermining the company’s strategy of prioritizing high values over sales volumes. Combustion engine S-Class deliveries were more than six times higher.

Chief Executive Officer Ola Källenius has put on a brave face, telling investors in February that customers were very happy with their purchase. But the company’s recent announcement of extensive upgrades to the vehicle speaks volumes. Along with a larger battery, these “status-conscious” improvements include a more traditional radiator grille featuring chrome-plated slats, a standing star on the hood, plus new seating options so rear passengers feel less impinged. Costs associated with these updates contributed to a steep decline in the Mercedes’ car unit’s profitability in the first quarter, when its fully electric car sales declined 8% compared with the prior year.

Margin Impact

Costs associated with revamping the EQS contributed to lower operating profit margins at Mercedes-Benz's car unit

The tweaks may help a bit, but there’s little the company can do about the sedan’s much-criticized shape — while not to my taste, a bulbous seven-seat EQS SUV is proving more popular. And the EQS still doesn’t come with the800-volt fast-charging system available on EVs at lower price points.

I’m certainly not suggesting that Mercedes and its peers lessen the pace of innovation — given the rapid advances of Chinese rivals, they need to move faster if anything — yet they should tread carefully when electrifying popular models to avoid turning off hesitant customers and compromising their heritage.

Sensibly, Mercedes chose not to market the electric G-Class as the “EQG” when it was unveiled last month, and its classic off-road silhouette remains instantly recognizable. Jaguar Land Rover Automotive Plc appears to be taking a similarly conservative approach with the forthcoming electric Range Rover which will include only “subtle” hints that it comes with a plug. Meanwhile, Ferrari NV has emphasized that its first EV, expected next year, will sound like a true Ferrari.

Automakers also need to remain as flexible as possible to adapt to fluctuating demand for EVs. BMW AG’s electric vehicles not only look much like its gasoline ones, they’re built on the same platform. So far, its cautious approach is paying off, with its EV sales outstripping those of Mercedes.

However, premium carmakers won’t persuade more consumers to go electric unless they also fix their horrible residual values. The cost of purchasing a one-year old EQS is almost 48% lower than the average new price, according to a study by US auto search portal iSeeCars. That’s the worst of any vehicle it analyzed.

Depreciation Problem

A one-year old lightly-used Mercedes EQS might cost you half as much as as a new one. The electric limousine lost value faster than the combustion engine version.

Source: iSeeCars

Note: Based on analysis of asking prices for 1.6 million new and lightly used cars listed for sale during the first quarter of this year. Mileage within 20% of 13,476 miles, the average miles driven per year. Low-volume models not included.

Indeed, I found almost-new EQSs selling for less than $50,000 on US listing sites, while in the UK they are available for less than £60,000 ($75,000), far below the UK new price of around £105,000 (before optional extras). To be fair, Mercedes is far from the only premium manufacturer struggling with residuals: Porsche Taycans and Audi etron GTs are also faring poorly in the second-hand market.

Consumer worries about technological obsolescence, high repair and insurance costs and establishing the condition of the battery are part of the problem. Another issue is pushing polarizing, expensive EVs to early adopters. Mercedes is now feeling the impact with the full force of a bullet-train.

Edited May 20, 2024 by Vratenza

[Vratenza]

Wonder if our local EV resale market is bucking the trend....😅

[inlinesix]

On 5/20/2024 at 10:17 AM, Vratenza said:

Wonder if our local EV resale market is bucking the trend....😅

When @RadXsketch itch, he can tell you

🤭

[Maxus-MIFA9]

On 5/20/2024 at 10:17 AM, Vratenza said:

https://www.bloomberg.com/opinion/articles/2024-05-16/why-mercedes-electric-eqs-sedan-flopped

Why Mercedes’ $100,000 Electric Jellybean Flopped

The German automaker’s limousine customers care as much about comfort and status as saving the planet. Now they should worry about residual values too.

May 16, 2024 at 12:00 PM GMT+8

When Mercedes-Benz Group AG unveiled a luxury electric sedan called the EQS in 2021 managers boasted about the radical aerodynamic design, billing it as the German automaker’s most significant launch in decades. Film director James Cameron and singer Alicia Keys were on hand to add their own superlatives for a vehicle that cost in excess of $100,000.

Three years later, the electric version of the flagship S-Class risks becoming one of the biggest flops in Mercedes’ storied history, and its shortcomings have contributed to the company’s decision to ditch a goal of selling only electric vehicles by 2030.

The German automaker’s stumble shows the dangers premium carmakers face as they try to take on Tesla Inc. and persuade their conservative clientele to get a plug. It also underscores the need to better protect EV resale values.

False Start

Sales of Mercedes' EQS electric sedan declined 40% last year

Source: Mercedes-Benz annual reports

Note: 2022 was the first full year of sales

Capacious S-Class limousines have chauffeured political and business leaders for decades, and are especially popular with Chinese elites. However, Mercedes opted for a less boxy design for the EQS, which was built on technical underpinnings developed specifically for EVs. Not only would the curved silhouette — which the company immodestly compared to a bullet train and critics dubbed a jellybean — reduce air resistance and thus boost efficiency and driving range, the EQS would also be clearly distinguishable from vehicles that have a combustion engine. Mercedes even sacrificed the traditional standing three-point star on the hood, instead integrating the badge into a sleek black radiator panel.

In hindsight, these were poor design choices. Mercedes’s pampered clientele aren’t as bothered about driving range and aerodynamics as they are about opulence and having sufficient room to relax in the back seats, which critics say the coupe-like rear fails to provide.

And notwithstanding some impressive electronics — the front “hyperscreen” spans the entire width of the dashboard — I tend to agree that the car doesn’t look as stately as the regular S-Class.

Sales of the luxury electric sedan declined 40% to just 14,100 units last year, according to Mercedes’ annual report. Price cuts in China and heavily discounted US lease deals failed to revive demand while undermining the company’s strategy of prioritizing high values over sales volumes. Combustion engine S-Class deliveries were more than six times higher.

Chief Executive Officer Ola Källenius has put on a brave face, telling investors in February that customers were very happy with their purchase. But the company’s recent announcement of extensive upgrades to the vehicle speaks volumes. Along with a larger battery, these “status-conscious” improvements include a more traditional radiator grille featuring chrome-plated slats, a standing star on the hood, plus new seating options so rear passengers feel less impinged. Costs associated with these updates contributed to a steep decline in the Mercedes’ car unit’s profitability in the first quarter, when its fully electric car sales declined 8% compared with the prior year.

Margin Impact

Costs associated with revamping the EQS contributed to lower operating profit margins at Mercedes-Benz's car unit

The tweaks may help a bit, but there’s little the company can do about the sedan’s much-criticized shape — while not to my taste, a bulbous seven-seat EQS SUV is proving more popular. And the EQS still doesn’t come with the800-volt fast-charging system available on EVs at lower price points.

I’m certainly not suggesting that Mercedes and its peers lessen the pace of innovation — given the rapid advances of Chinese rivals, they need to move faster if anything — yet they should tread carefully when electrifying popular models to avoid turning off hesitant customers and compromising their heritage.

Sensibly, Mercedes chose not to market the electric G-Class as the “EQG” when it was unveiled last month, and its classic off-road silhouette remains instantly recognizable. Jaguar Land Rover Automotive Plc appears to be taking a similarly conservative approach with the forthcoming electric Range Rover which will include only “subtle” hints that it comes with a plug. Meanwhile, Ferrari NV has emphasized that its first EV, expected next year, will sound like a true Ferrari.

Automakers also need to remain as flexible as possible to adapt to fluctuating demand for EVs. BMW AG’s electric vehicles not only look much like its gasoline ones, they’re built on the same platform. So far, its cautious approach is paying off, with its EV sales outstripping those of Mercedes.

However, premium carmakers won’t persuade more consumers to go electric unless they also fix their horrible residual values. The cost of purchasing a one-year old EQS is almost 48% lower than the average new price, according to a study by US auto search portal iSeeCars. That’s the worst of any vehicle it analyzed.

Depreciation Problem

A one-year old lightly-used Mercedes EQS might cost you half as much as as a new one. The electric limousine lost value faster than the combustion engine version.

Source: iSeeCars

Note: Based on analysis of asking prices for 1.6 million new and lightly used cars listed for sale during the first quarter of this year. Mileage within 20% of 13,476 miles, the average miles driven per year. Low-volume models not included.

Indeed, I found almost-new EQSs selling for less than $50,000 on US listing sites, while in the UK they are available for less than £60,000 ($75,000), far below the UK new price of around £105,000 (before optional extras). To be fair, Mercedes is far from the only premium manufacturer struggling with residuals: Porsche Taycans and Audi etron GTs are also faring poorly in the second-hand market.

Consumer worries about technological obsolescence, high repair and insurance costs and establishing the condition of the battery are part of the problem. Another issue is pushing polarizing, expensive EVs to early adopters. Mercedes is now feeling the impact with the full force of a bullet-train.

This EQS really ugly looking. So different from the normal S-Class. 

[Maxus-MIFA9]

On 5/20/2024 at 10:17 AM, Vratenza said:

Wonder if our local EV resale market is bucking the trend....😅

Haven't even receive my EV and you are reviewing about resale value .... 

[inlinesix]

On 5/20/2024 at 11:03 AM, Maxus-MIFA9 said:

This EQS really ugly looking. So different from the normal S-Class. 

This Photo ugly la.

 

[Vratenza]

On 5/20/2024 at 10:44 AM, inlinesix said:

When @RadXsketch itch, he can tell you

🤭

he no care resale value one lah...

[RadX]

On 5/20/2024 at 12:23 PM, Vratenza said:

he no care resale value one lah...

exactly

 

[Vratenza]

On 5/20/2024 at 11:06 AM, Maxus-MIFA9 said:

Haven't even receive my EV and you are reviewing about resale value .... 

you own cars for 10yrs...resale value dun matter to you also

[Theoldjaffa]

On 5/20/2024 at 10:17 AM, Vratenza said:

https://www.bloomberg.com/opinion/articles/2024-05-16/why-mercedes-electric-eqs-sedan-flopped

Why Mercedes’ $100,000 Electric Jellybean Flopped

The German automaker’s limousine customers care as much about comfort and status as saving the planet. Now they should worry about residual values too.

May 16, 2024 at 12:00 PM GMT+8

When Mercedes-Benz Group AG unveiled a luxury electric sedan called the EQS in 2021 managers boasted about the radical aerodynamic design, billing it as the German automaker’s most significant launch in decades. Film director James Cameron and singer Alicia Keys were on hand to add their own superlatives for a vehicle that cost in excess of $100,000.

Three years later, the electric version of the flagship S-Class risks becoming one of the biggest flops in Mercedes’ storied history, and its shortcomings have contributed to the company’s decision to ditch a goal of selling only electric vehicles by 2030.

The German automaker’s stumble shows the dangers premium carmakers face as they try to take on Tesla Inc. and persuade their conservative clientele to get a plug. It also underscores the need to better protect EV resale values.

False Start

Sales of Mercedes' EQS electric sedan declined 40% last year

Source: Mercedes-Benz annual reports

Note: 2022 was the first full year of sales

Capacious S-Class limousines have chauffeured political and business leaders for decades, and are especially popular with Chinese elites. However, Mercedes opted for a less boxy design for the EQS, which was built on technical underpinnings developed specifically for EVs. Not only would the curved silhouette — which the company immodestly compared to a bullet train and critics dubbed a jellybean — reduce air resistance and thus boost efficiency and driving range, the EQS would also be clearly distinguishable from vehicles that have a combustion engine. Mercedes even sacrificed the traditional standing three-point star on the hood, instead integrating the badge into a sleek black radiator panel.

In hindsight, these were poor design choices. Mercedes’s pampered clientele aren’t as bothered about driving range and aerodynamics as they are about opulence and having sufficient room to relax in the back seats, which critics say the coupe-like rear fails to provide.

And notwithstanding some impressive electronics — the front “hyperscreen” spans the entire width of the dashboard — I tend to agree that the car doesn’t look as stately as the regular S-Class.

Sales of the luxury electric sedan declined 40% to just 14,100 units last year, according to Mercedes’ annual report. Price cuts in China and heavily discounted US lease deals failed to revive demand while undermining the company’s strategy of prioritizing high values over sales volumes. Combustion engine S-Class deliveries were more than six times higher.

Chief Executive Officer Ola Källenius has put on a brave face, telling investors in February that customers were very happy with their purchase. But the company’s recent announcement of extensive upgrades to the vehicle speaks volumes. Along with a larger battery, these “status-conscious” improvements include a more traditional radiator grille featuring chrome-plated slats, a standing star on the hood, plus new seating options so rear passengers feel less impinged. Costs associated with these updates contributed to a steep decline in the Mercedes’ car unit’s profitability in the first quarter, when its fully electric car sales declined 8% compared with the prior year.

Margin Impact

Costs associated with revamping the EQS contributed to lower operating profit margins at Mercedes-Benz's car unit

The tweaks may help a bit, but there’s little the company can do about the sedan’s much-criticized shape — while not to my taste, a bulbous seven-seat EQS SUV is proving more popular. And the EQS still doesn’t come with the800-volt fast-charging system available on EVs at lower price points.

I’m certainly not suggesting that Mercedes and its peers lessen the pace of innovation — given the rapid advances of Chinese rivals, they need to move faster if anything — yet they should tread carefully when electrifying popular models to avoid turning off hesitant customers and compromising their heritage.

Sensibly, Mercedes chose not to market the electric G-Class as the “EQG” when it was unveiled last month, and its classic off-road silhouette remains instantly recognizable. Jaguar Land Rover Automotive Plc appears to be taking a similarly conservative approach with the forthcoming electric Range Rover which will include only “subtle” hints that it comes with a plug. Meanwhile, Ferrari NV has emphasized that its first EV, expected next year, will sound like a true Ferrari.

Automakers also need to remain as flexible as possible to adapt to fluctuating demand for EVs. BMW AG’s electric vehicles not only look much like its gasoline ones, they’re built on the same platform. So far, its cautious approach is paying off, with its EV sales outstripping those of Mercedes.

However, premium carmakers won’t persuade more consumers to go electric unless they also fix their horrible residual values. The cost of purchasing a one-year old EQS is almost 48% lower than the average new price, according to a study by US auto search portal iSeeCars. That’s the worst of any vehicle it analyzed.

Depreciation Problem

A one-year old lightly-used Mercedes EQS might cost you half as much as as a new one. The electric limousine lost value faster than the combustion engine version.

Source: iSeeCars

Note: Based on analysis of asking prices for 1.6 million new and lightly used cars listed for sale during the first quarter of this year. Mileage within 20% of 13,476 miles, the average miles driven per year. Low-volume models not included.

Indeed, I found almost-new EQSs selling for less than $50,000 on US listing sites, while in the UK they are available for less than £60,000 ($75,000), far below the UK new price of around £105,000 (before optional extras). To be fair, Mercedes is far from the only premium manufacturer struggling with residuals: Porsche Taycans and Audi etron GTs are also faring poorly in the second-hand market.

Consumer worries about technological obsolescence, high repair and insurance costs and establishing the condition of the battery are part of the problem. Another issue is pushing polarizing, expensive EVs to early adopters. Mercedes is now feeling the impact with the full force of a bullet-train.

I spotted one recently... i thought SUV sia

[Lethalstrike]

On 5/21/2024 at 4:58 PM, Theoldjaffa said:

I spotted one recently... i thought SUV sia

This particular example is the real deal, EQS53 AMG. Annual road tax over $7k as it has 650bhp 😆

[Theoldjaffa]

On 5/21/2024 at 5:04 PM, Lethalstrike said:

This particular example is the real deal, EQS53 AMG. Annual road tax over $7k as it has 650bhp 😆

And it cost 800k thereabouts right 😱

[Lethalstrike]

On 5/21/2024 at 6:13 PM, Theoldjaffa said:

And it cost 800k thereabouts right 😱

Close to $900k now before any discounts. A lot of bragging rights 🤣

[Vratenza]

On 5/21/2024 at 5:04 PM, Lethalstrike said:

This particular example is the real deal, EQS53 AMG. Annual road tax over $7k as it has 650bhp 😆

This road tax amt is sub sub water relative to the cost of the car. 

Take for example Tesla Model 3 dual motor.. Cost now is  less than 300k, road tax is just above 5k.

 

[Vratenza]

On 5/21/2024 at 4:58 PM, Theoldjaffa said:

I spotted one recently... i thought SUV sia

That is a 900k jellybean.... 

[Lethalstrike]

On 5/21/2024 at 8:10 PM, Vratenza said:

That is a 900k jellybean.... 

The maid at home will clean the multi spoke rims until crazy 😁

[Sdf4786k]

On 5/18/2024 at 6:15 PM, Vratenza said:

This one cheaper.. faster.... But someone gonna say PRC beng... 

It’s the Toyota sera of yesterday era lol

[Vratenza]

On 5/22/2024 at 11:57 AM, Sdf4786k said:

It’s the Toyota sera of yesterday era lol

This? 

At least now is Nippon Beng...