Mercedes unveils electric vehicle with longer range than any Tesla as China threat grows


The Mercedes-Benz Concept CLA Class electric vehicle (EV) automobile during preparations ahead of the Munich Motor Show (IAA) in Munich, Germany, on Sunday.

Alex Kraus/Bloomberg via Getty Images

Mercedes-Benz Group AG unveiled an electric vehicle with a longer range than any Tesla Inc. model on the market as the German luxury-car maker intensifies its bid to challenge Elon Musk.

The company presented a near-production concept of its CLA sedan rated to go more than 750 kilometers (466 miles) on a single charge, beating Tesla’s refreshed Model 3. The car is Mercedes’s first based on its upcoming EV underpinnings, with a battery system that can add 400 kilometers of range in just 15 minutes of charging.

“We’re taking it to the next level,” Mercedes Chief Technology Officer Markus Schäfer said Sunday in an interview ahead of the IAA car show in Munich. “This car is extremely important for innovation reasons and to push the limits for what we can do with a series car.”

Mercedes is under pressure to bolster its lineup after disappointing sales in China forced the company to cut prices on some of its electric models.

BMW AG on Saturday unveiled its own next-generation EV, a sleek coupe featuring a digital display projected onto the entire width of the windscreen. Both the BMW prototype and Mercedes’s future EV are due to go into production around mid-decade.

Mercedes is trying to fend off Tesla and bolster sales in China, where customers are increasingly going for homegrown brands such as BYD Co. and Nio Inc. that have been better at building EVs with software geared to local tastes. The company has a goal to sell only EVs where possible by the end of this decade and plans to set up eight battery factories with partners.

The CLA concept lacks the bowed roof line of the brand’s EQS and EQE sedans. While their low-slung roof makes them more aerodynamic, increasing their range, the design also reduces headroom in the rear-seating compartment. That’s a drawback in the Chinese market, where wealthy customers often prefer to be chauffeured.

Chief Executive Officer Ola Källenius has outlined a strategy to bolster margins by focusing resources on top-end vehicles including the Maybach limousines, AMG performance cars and G-Wagon offroader, while shifting away from less profitable entry-level models like the compact A-Class.

The new CLA concept sets out how the manufacturer will try to defend its position in the entry-level luxury segment where Mercedes tries to attract younger customers, competing with volume manufacturers like Volkswagen AG and Toyota Motor Corp.

Read more: Praised by Elon Musk, top Chinese EV maker BYD urges China’s car brands to go global and ‘demolish the old legends’

Subscribe to Well Adjusted, our newsletter full of simple strategies to work smarter and live better, from the Fortune Well team. Sign up today.