Mercedes Benz’s goal: to be the top luxury electric vehicles brand, challenging Tesla’s desirability


Mercedes-Benz, a prominent German automaker, has acknowledged the decline in its share of the U.S. luxury market as customers opt for Tesla’s electric vehicles (EVs) over their V8 sedans and sport utility vehicles. In response, Mercedes-Benz is emulating Tesla’s strategy by developing its own charging network, intensifying its electrified fleet, and incorporating Level 3 autonomous driving technology into its vehicles. The ultimate aim of Mercedes-Benz is to establish itself as the premier luxury brand in the electric vehicles market, surpassing Tesla’s desirability and appeal.

Aggressive Push Towards EVs:

Under the leadership of Dimitris Psillakis, president and CEO of Mercedes-Benz North America, the company is undertaking an ambitious drive towards EVs. The futuristic EQS sedan, Mercedes-Benz’s first electric vehicles, was debuted in October 2021, and it was promptly followed by four more models, including three electric SUVs. The EQS SUV and EQE SUV are manufactured at the Tuscaloosa plant in Alabama, while the lithium-ion batteries are supplied by the brand-new factory in Bibb County. Mercedes-Benz has set a goal to transition to a fully electric lineup by 2030.

Striving for Desirability:

Psillakis highlights the significance of achieving a balance between exceptional products, appealing design, and supportive services to become the premier luxury brand in the electric vehicles segment. Mercedes-Benz does not perceive Tesla as a direct luxury competitor, but rather as a disruptive force within the automotive industry, especially in the electric vehicle domain. This strategy appears to yield positive results as Mercedes-Benz reported a substantial surge in EV sales, with 7,341 units sold in Q1 2023, representing a remarkable 251% increase compared to the previous year. Electric vehicles currently account for 12% of the company’s sales in the U.S.

Shifting Landscape of Luxury:

Luxury buyers are increasingly drawn to electric vehicles due to their higher disposable income and tech-oriented mindset. Tesla revolutionized the concept of luxury in the automotive sector, but its market share has been declining, peaking at 80% in 2019. The luxury segment now comprises 6% of the U.S. automotive market. However, range anxiety and limited public charging availability continue to impede widespread adoption of electric vehicles.

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Overcoming Charging Challenges:

Charging infrastructure remains a significant obstacle for customers considering electric vehicles. Mercedes-Benz aims to address this challenge by developing its own charging network, initially launching in the U.S. and Canada and open to non-Mercedes models as well. By providing better service, convenience, and alleviating concerns associated with electric vehicles, Mercedes-Benz aims to enhance the overall ownership experience. The charging network, despite its expense, is perceived as a strategic move to reassure customers and enhance the brand.

The Road Ahead:

Industry experts acknowledge that Tesla’s highly reliable supercharger network and established models like the Model 3 and Model Y present formidable competition for luxury brands like Mercedes-Benz. However, Mercedes-Benz is closing the gap and poised for success. Notably, their EQ S450+ and EQ S580 electric vehicles surpassed their EPA range estimates during comprehensive tests, a rarity in the automotive industry. Mercedes-Benz‘s focus on the larger EQS SUV and EQE sedan has resonated with consumers, providing an edge over competitors. The recent introduction of the Mercedes-Maybach EQS 680 SUV, the first EV from the exclusive marque, further demonstrates their commitment to sustainable luxury.


Mercedes-Benz’s pursuit of electric vehicle dominance is evident through its strategic initiatives, including the development of a charging network, expanding the electrified fleet, and incorporating advanced autonomous driving technology. The company aims to become the most desirable luxury brand in the electric vehicles market, surpassing Tesla. By focusing on product excellence, design, and supportive services, Mercedes-Benz is making significant progress in the EV segment, as reflected by the notable increase in sales. While challenges remain, such as charging infrastructure and Tesla’s market presence, Mercedes-Benz’s commitment to electrification positions them well for the future.

James Alworth

James Alworth

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