Mercedes says EQE, E-Class have equal profit margin

Mercedes-Benz says its profit margin for the new full-electric EQE large sedan is equal to those of the E-Class, the model's internal-combustion engine equivalent.

EQE sales started in Europe in the second quarter. The model has a base price of about 70,000 euros (about $71,000), while the E Class starts at about 50,000 euros for a base diesel sedan, although AMG performance variants can top 100,000 euros.

"It's more or less the first quarter of EQE sales, but at this point the EQE margin is at the point of the E-Class margin," Mercedes CFO Harald Wilhelm said Wednesday on the automaker's first-half results call, adding that the EQE might even be slightly ahead of the E-Class right now.

Automakers are struggling to close the profit and cost gap between full-electric and internal-combustion cars ahead of expected EU regulations that will effectively ban sales of gasoline and diesel models after 2035.

Wilhelm said the model above the EQE, the EQS, still lagged its internal-combustion equivalent, the S-Class, on margin. "We saw that the EQS margin is starting to become healthy," he said. "Maybe it's not exactly on S-Class level but it's not too far from it."

Mercedes CEO Ola Kallenius said on the call that the automaker plans to scale up sales of full-electric models vs plug-in hybrids in the second half of this year. In the same period in 2021, roughly one-third of all electrified (full-electric and plug-in hybrid) models were full-electric, but Kallenius wants to increase that to 50 percent.   

That would represent a jump from 21,000 full-electric vehicles sold in the first half to 31,000 in the second half, while plug-in hybrid sales are expected to decline from 39,000 to 32,000. 

The EQE and the EQS SUV – which will be built in Mercedes' Alabama factory -- are expected to contribute many of those new sales, Kallenius said.