The Mercedes GLC electric car at the IAA Mobility car show in Munich. Its design nods to vintage Maybach styling and a lithium-ion battery provides a maximum range of 713km. Photo / Felix Schmitt, The New York Times
The spotlight at the Munich auto show this year is swinging back to BMW, Mercedes and Volkswagen after previously focusing on Chinese automakers.
German carmakers are using their home-field advantage at Europe’s largest auto show this week to present new models designed to rival their Chinese competitors and attract American drivers, despite costs added by President Donald Trump’s trade war.
BMW, Mercedes-Benz and Volkswagen unveiled their new electric vehicles at the biennial IAA Mobility show, which began Tuesday in Munich, with a level of excitement and self-assuredness that had been absent in recent years.
That attitude follows years of headwinds, as the manufacturers watched Chinese startups come to dominate the EV industry by leaping ahead with electric and hybrid technology that they were able to develop, scale and bring to market faster than their European counterparts.
German automakers were also clobbered by billions in losses after Trump hit European automakers with tariffs of 27.5% in April. The tariffs have since been reduced to 15%, but that rate has yet to be applied.
But after investing hundreds of billions in new technology and software, the Germans are offering new models that have competitive charging times, driving range and customer-driven entertainment systems.
“We are going on the offensive,” Oliver Blume, CEO of Volkswagen, told reporters Monday. And Ola Källenius, CEO of Mercedes, described “a spirit of optimism” rippling through the German automobile industry, which he said “is investing like never before, with an eye to the future”.
But the same industry has shed more than 50,000 jobs in the past year. Nearly all of the major German carmakers are restructuring as they seek to streamline operations to compete with the Chinese.
Doing so will be a tall order, as the Chinese cars are still often cheaper, despite tariffs imposed by the European Union, allowing them to more than double their share of the European market in the past year.
“BYD is in Europe to stay,” Stella Li, the company’s executive vice president, told reporters in Munich, where the Chinese carmaker and global leader in EV sales unveiled its first station wagon for Europe, a plug-in hybrid version of its popular Seal model. It will be produced in Hungary.
Chinese startup Leapmotor, which has a partnership with global carmaker Stellantis, presented a new hatchback intended to appeal to younger drivers. Xpeng, which is opening a research and development centre in Munich, unveiled its Next P7, a model that relies on artificial intelligence to power its systems.
Two years ago, only the Chinese boasted that level of technology. But the models on display from the leading European automakers are no longer built with the mechanics first. Instead, they rely on AI and software and have battery technology that provides longer range and faster charging. The cars also recognise the driver to adjust the lighting, dashboard and entertainment systems.
Chinese brands have more than doubled their share of sales in Europe over the past year, according to JATO Dynamics. In May, they reached 5.9% of total sales across the continent, up from the 2.9% a year earlier.
In the same month, however, Volkswagen, Renault and Stellantis – which in Europe makes Fiat, Peugeot and Jeep – topped the list of carmakers registering the most vehicles on the continent, reflecting the brand loyalty many buyers here have.
Aware of the power of their heritage, BMW, Mercedes and Volkswagen made references to their legacies, in look and feel.
For BMW, that meant combining its fully electric Neue Klasse iX3 SUV model with lines and lights that evoke sedans of the 1960s, with a panoramic dashboard, improved efficiency driven by a lithium-ion battery and high-performance computers and software.
The iX3, which will go on sale next year, can travel up to 800km on one charge, and can add 369km in 10 minutes.
The fully electric version of Mercedes’ bestselling model, the GLC, features a grille illuminated with 942 dots, a nod to the original Maybach honeycomb radiator. In the latest version, which goes on sale next year, a lithium-ion battery provides a maximum range of 713km and the ability to recapture a quarter of that after just 10 minutes of charging.
The German models also integrate intelligent elements, like the hitch on the iX3 that automatically flips out or folds away at the touch of a button. On the GLC, pressing the Mercedes star logo on the hood pops the frunk, or front storage compartment, which can fit two carry-on bags.
Volkswagen, German for “the people’s car,” is returning to its traditional naming scheme for its latest electric model, the ID.Polo, which is slated for production early next year. Aimed at the small-car segment, it will sell for less than €25,000 (about $49,000).
The company has been squeezed between its losses in the Chinese market and the “several billion euros” that Blume attributed to the US tariffs on European cars. Both Audi or Porsche, two of the top-selling Volkswagen brands in the United States, are imported.
Volkswagen, which already employs 5500 people at its plant in Chattanooga, Tennessee, is considering more large-scale investments in the United States, contingent on an agreement that Blume said he was discussing with the Trump administration.
“We are not expecting that the tariffs will be lowered for Volkswagen, but the United States must give something before we will make such investments,” Blume said, without elaborating.
This article originally appeared in The New York Times.
Written by: Melissa Eddy
Photographs by: Felix Schmitt
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