Mercedes-Benz ‘Flips The Switch’ On EQC Production At Its Bremen Factory

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Mercedes-Benz announced the start of production for its EQC this week, as chairman of the board Dieter Zetsche announced that, “this is the dawn of a new era at Mercedes.” At a starting price of 59,900 euros, the EQC will be well-equipped, but will initially launch with the preconfigured 400 4MATIC Edition 1886, at a premium price of 84,930 euros, according to the Mercedes Passion Blog (via Electrive).

Starting up production of its new vehicle with the most expensive build reaffirms Tesla’s approach to production and shows that while established automotive manufacturers do indeed have decades more experience in building vehicles, Tesla has been innovative in quite a few ways. The price of the EQC pits it directly against Tesla’s Model X in the full-sized luxury SUV category, and a category in which the Model X has already stolen significant market share from Mercedes-Benz.

“The staff in Bremen have many years of experience in the production of vehicles with a wide range of drive types,” the press release announcing the start of production said. “We are building on this know-how in the electric age, too. With the start of production of the Mercedes-Benz EQC, we are turning the switch today – for the electric mobility of the future.”

The EQC will be built at the Mercedes-Benz Bremen factory alongside its traditional internal combustion vehicles, the C-Class sedan and the GLC SUV. This capability speaks to the similarities the vehicle will have with traditional Mercedes-Benz vehicles, even as the company ‘flips the switch’ in the conversion to building electric vehicles. A funny thing, as most switches in the world are either on or off with no room for this type of phase-in.

Markus Shaffer, Mercedes-Benz Board Member said that, “flexibility and efficiency are very important pillars of the strategy in our global production network of Mercedes-Benz cars.” Building the EQC at an existing factory, in parallel to existing internal combustion vehicle lines, ensures that sufficient resources will be available.

Mercedes-Benz is initially firing off production of the EQC in Germany, but plans to start production of the EQC through its Beijing Benz Automotive (BBAC) joint venture for the Chinese market later this year. Tesla was the first foreign automotive company to build its own wholly owned and operated factory in China, with its Gigafactory 3 in Shanghai.

Securing a sufficient supply of high quality batteries is the single metric to watch for any automotive company that is not actively producing its own cells in-house or developing exclusive partnerships to do so. Without a dedicated battery supply, automakers are forced to fight amongst each other in bidding wars to secure enough batteries for their vehicles as the electric vehicle revolution kicks into high gear.

Electrive reports that the initial launch being limited to low volumes of the exclusive 1886 trim, “could be due to the fact that the Swabians are not getting enough batteries.” Just the same, Daimler appears to be on track to bring the vehicle to market in line with its ‘mid-2019’ projection, with the first EQCs expected to head to customers in June.

A more traditional market launch to the Mercedes-Benz dealership networks will happen in October, with other customers receiving their EQCs in the second quarter of 2020.

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Source: Mercedes Passion Blog via Electrive

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Kyle Field

I'm a tech geek passionately in search of actionable ways to reduce the negative impact my life has on the planet, save money and reduce stress. Live intentionally, make conscious decisions, love more, act responsibly, play. The more you know, the less you need. As an activist investor, Kyle owns long term holdings in Tesla, Lightning eMotors, Arcimoto, and SolarEdge.

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