FRANKFURT -- Mercedes-Benz is working on an electric car with a range of up to 500km (311 miles) that could compete with Tesla’s Model S battery-powered vehicle, development chief Thomas Weber told German magazine auto motor und sport.
"We are working on an intelligent concept for a highly attractive electric vehicle with a range of 400-500km (228-311 miles),” Weber said in an interview, adding that the car would come “soon.”
The electric drive concept would fit into Mercedes's flexible architecture, allowing it to be employed in more than one car, according to Weber.
German premium carmakers are taking Tesla more seriously given its success in key markets such as California. Audi will showcase the e-tron quattro concept at this month’s Frankfurt show that will give a taste of what is to come when it launches an all-electric SUV in 2018 to compete with the upcoming Tesla Model X. BMW is reported to also plan an i5 electric car based on the 5 series.
As governments impose tougher fuel economy targets, Mercedes parent Daimler spent roughly half of its r&d budget of 5.68 billion euros last year to develop low-emission technologies.
Mercedes is no stranger to electric vehicles. It has had a variety of small fleets of battery electric or fuel cell electric cars on the road for years now, including versions of the Smart ForTwo, A class, B class and SLS AMG. Daimler founded two fully-owned new subsidiaries for making both EV batteries and their lithium ion cells.
Unlike other German carmakers that scoffed at Tesla when it revealed it would use laptop battery cells to power its Roadster, Daimler took a different approach. It partnered with Tesla, initially taking a 9.1 percent stake in May 2009, received a seat on its board and employed Tesla battery cells in its B-class Electric Drive, a compact minivan that had a range of around 200 kilometers.
But as Tesla grew, ties with the German carmaker weakened, and Daimler was eventually removed from the board in June 2014. Afterwards, it divested the remaining 4 percent of its shares.
Daimler is also investing in ten hydrogen refueling stations as part of plans to bring a mass-produced, competitively priced fuel cell vehicles to market starting 2017, together with Ford and Nissan.
Nevertheless, Daimler believes that for the medium term the most successful commercial technology will not be battery electric or fuel cell cars, but plug-in hybrids. It announced late last year it would bring at least 10 new plug-ins by 2017 starting with the S class and the C class, with the C 350e.
Electric cars, which use a simplistic motor and require no complex mechanical machinery such as a transmissions, are lowering the barrier to entry in the automotive sector, making it possible for both startups like Tesla and established tech giants like Google and Apple to explore projects.
Sony CEO Kazuo Hirai told The Financial Times that he is open to a tie-up with a traditional carmaker to capture the automotive market.
“If we fundamentally believer at some point in time that we can make a difference in the automotive space, it’s something that we will look at,” he told the paper. When asked about teaming up with a car company, Hirai responded: “Absolutely. That’s why I’m saying never say never.”