Mercedes-Benz's electric vehicle strategy for the U.S. market will take a contrarian approach when it unfolds next year, opting for profit margin over sales volume.
The automaker will launch its EQ subbrand into the truck- and crossover-crazed market with an electric version of its tony S-Class sedan, Daimler CEO Ola Källenius said in a media roundtable last week.
That's no accident.
Mercedes reversed an earlier plan to debut its electric model line in the U.S. with the EQC crossover, a battery-powered version of the brand's top-selling GLC compact.
"We will start and lead with the EQS, that's our strategy for the U.S.," Källenius said of the rethink. "We said that for positioning the EQ brand in the U.S., start from the top and then go from there."
The EQS sedan, Mercedes' answer to Tesla's Model S, is slated to arrive in the U.S. next summer. It will travel more than 430 miles on a single charge, based on the WLTP testing cycle.
The EQS should benefit from the halo of the flagship S-Class, which draws some of the brand's most loyal customers.
Working from the top of the lineup down allows Mercedes-Benz to build its consumer base for electric vehicles, noted Sam Fiorani, vice president at AutoForecast Solutions.
"Instead of shooting for high volume, starting with the niche models provides higher transaction prices and helps them pay off the investment for all of the electrification coming in the next few years," Fiorani said. "When the performance benefits of high-end models such as the EQS become apparent, buyers who can't afford the EQS will be lined up for less expensive vehicles such as the EQC."
"Cadillac has acknowledged that 300 miles is table stakes and 400 is more desirable while brands like Tesla and Lucid are approaching 500 miles."