Mercedes-EQ to thrive in Australia

MERCEDES-BENZ Australia/Pacific could sell more than 10,000 electric vehicles per year within a decade as demand for battery-powered vehicles is forecast to finally equal global trends and assist the company to launch its Mercedes-EQ sub-brand locally.

The Generation EQ mid-size SUV concept shown at September’s Paris motor show will be joined by a trio of smaller models and an equal number of larger electric vehicles that Mercedes-Benz has said together could snare up to 25 per cent of its total global sales by 2025.

Despite a low uptake of electric vehicles Down Under, however, Mercedes-Benz Australia/Pacific CEO Horst von Sanden said he expected demand would grow significantly for such cars in the coming years in this market.

“I’m sure we will see similar percentages of electric cars in Australia as we see anywhere else in the world,” Mr von Sanden told GoAuto at a media event in Melbourne, before referring to Benz’s global plan for a 25 per cent electric vehicle share.

“I think Australia won’t be running much behind this time plan because Australia is clearly a country of early adopters and once the technology of electric cars is at a maturity level where people see the benefit and don’t experience any disadvantages, they will go for it.”

According to official VFACTS sales figures, just 199 electric vehicles – excluding Tesla, which does not contribute figures to the industry statistics body – have been sold to the end of October this year out of a total market that numbered 980,433 units.

Mr von Sanden nominated Australia’s reliance on coal power for its electricity generation and a lack of charging infrastructure and government incentives as reasons for the slow uptake of electric vehicles.

Left: Mercedes-Benz Australia/Pacific CEO Horst von Sanden.However, he added that issues of charging convenience and driving range between ‘refuelling’ were the greatest barriers to electric vehicle ownership and would be solved with future models such as the Mercedes-EQ range.

“I think once you close the loop, it all makes sense and people will go for it,” he continued.

“Even today if you use energy that was generated by coal power it was still from an ecological point of view beneficial. It becomes more beneficial the more renewable energy you use, but I think it’s still positive energy balance so to speak.

“It’s more the reservations of people (limiting electric vehicle sales) … and once they figure out they’re not limited in terms of range, it’s easy to charge, you can charge from your household, and the power and the performance of those cars there is no compromise, I think this is all a learning process.”

It has been announced that the production version of the Generation EQ Concept will have a 70kWh battery pack to deliver 500km of range between recharging. It is a figure Mercedes-Benz executives have said is a minimum before mainstream premium vehicle buyers would see an electric vehicle without compromise.

The brand has also stated that the production medium SUV would be priced globally at around the same price as a flagship Mercedes-Benz GLC, which in this market tops out at $101,400 for the Mercedes-AMG GLC43 model grade.

However, Mr von Sanden said it was too early to discuss local pricing and that several barriers remained.

“The whole pricing discussion is a bit premature at this point in time,” he said.

“We compete against all the others and if there is a premium to be paid for the electric vehicle technology, this will apply to everyone. We are absolutely aware we have to position those cars (Mercedes-EQ) attractively and competitively.

“We will make every effort to price it appropriately and hopefully other limiting factors such as luxury car tax (LCT) will be sorted out and there will be support for this new, more environmentally friendly technology.

“The luxury car tax … is not a sensible tax. It should be questioned and as an industry we will continue to question that and if that’s the case then electric vehicles should be included.”

At current figures, LCT could add around $7000 to the price of a $100,000 electric vehicle at a time when, as Mr von Sanden pointed out, the technology remains costly.

Based on current trends Mercedes-Benz will sell more than 41,000 vehicles in Australia this year. Even if figures stagnate by 2025 – although the brand forecasts continued growth in the coming years – then a seven-model-plus line-up of Mercedes-EQ products would notch up five-figure volume, or around 50 times current electric vehicle annual volume for all brands.