Mercedes-Benz to launch BYD-powered EVs to keep pace with Tesla, Chinese automakers

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According to a new report, Mercedes-Benz plans to launch new EVs powered by BYD’s LFP Blade battery. The move comes after the German luxury automaker revealed its new CLA electric sedan concept, the first of its entry-level class designed to take on EV leaders like Tesla.

Chinese newspaper CBEA reported that Mercedes-Benz will begin production of the new EVs fitted with BYD’s blade battery in 2025 (via Car News China).

Mercedes-Benz officials claim the newly revealed CLA electric sedan concept will have cruising range of 466 miles (750 km) featuring LFP batteries from BYD.

The move would make sense as Mercedes-Benz (Daimler) and BYD have a history of cooperating. In 2010, the two companies established an R&D joint venture to develop and produce new energy vehicles (NEV). Under the Denza sub-brand, the JV launched a new NEV in China.

Rumors have been swirling as early as 2020 that Mercedes would partner with BYD to use its blade batteries.

Like many luxury automakers, Mercedes uses ternary (Nickel Manganese Cobalt) batteries for its current EV lineup.

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Mercedes-Benz electric CLA concept (Source: Mercedes-Benz)

However, LFP batteries are gaining popularity due to the cheaper costs. LFP batteries require less precious metals like Cobalt, enabling them to be produced for cheaper.

Mercedes-Benz CEO Ola Kallenius explained at the IAA Mobility show in Munich how the company will deal with costs, including battery raw materials, to enhance profit margins.

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Mercedes-Benz electric CLA concept (Source: Mercedes-Benz)

Mercedes CLA electric sedan concept to rival Tesla

The new CLA concept will be the first Mercedes EV to use its next-gen 800V MMA platform. Mercedes is nicknaming it the “one-liter car” in reference to its energy consumption of around 5.2 mi/kWh (12 kWh/ 100km).

The newly developed EV will kick off an entirely new class of entry-level Mercedes EVs starting in 2025 to compete with Tesla and automakers in China.

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Mercedes-Benz electric CLA concept (Source: Mercedes-Benz)

One of the biggest reasons for the lower price point – LFP batteries. Many automakers are moving to LFP to lower costs.

Tesla confirmed that nearly half of its vehicles produced in the first quarter of the year were LFP. CEO Elon Musk has mentioned several times that the EV maker plans to shift more vehicles to LFP to overcome raw material supply constraints.

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Mercedes-Benz CLA concept interior (Source: Mercedes-Benz)

The EV leaders uses BYD blade batteries in some Model 3 versions and the new Model Y built at Gigafactory Berlin.

Other automakers, including Ford, Toyota, and Hyundai, have vehicles equipped with BYD’s Blade batteries.

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Kia EV5 electric SUV (Source: Kia)

Kia’s newly released EV5 electric SUV (expected to start at around $22,000 in China) is another model expected to use BYD LFP batteries.

Meanwhile, in China, LFP batteries accounted for over 68% (103.9 GWh) of total battery capacity installed in the first half of the year.

Mercedes also plans to launch a smaller, cheaper electric G-Class model to expand the brand into new markets (read more about the mini G-Wagon here).

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