Mercedes' new electric SUV to take on Tesla’s Model Y

German car maker aims to go all-electric by the end of the decade

The Mercedes-Benz AG all-electric EQE SUV at the Musee Rodin in Paris, France, on Sunday, October 16, 2022. Bloomberg

Mercedes-Benz Group is broadening its battery-powered line-up with a sport utility vehicle that will take on Tesla's Model Y in another step towards the car maker’s goal to go all-electric by the end of the decade.

The EQE SUV, unveiled on the eve of the Paris car show, will edge out the cheaper Model Y with 590 kilometres of driving range and start at about €70,000 ($68,000) when sales begin late this year.

It is the fourth model to use Mercedes’ dedicated electric vehicle platform, which also underpins the flagship EQS sedan.

“It is the latest proof that we are consistently executing on our strategy to go all-electric,” Mercedes chief executive Ola Kallenius said.

The SUV features a 141-centimetre-wide screen, and the high-performance AMG version will reach a top speed of 210km an hour.

The car maker also announced its vehicles will be the first non-Apple devices to offer a surround-sound system developed by Dolby Laboratories.

Mercedes plans to offer electric siblings for all combustion-engine models in its portfolio by the end of the year, then introduce three new platforms to underpin its cars, AMGs and vans by 2025.

By 2030, it will only sell electric vehicles in markets where phasing out engines entirely is possible.

To help fund this ambitious strategy, Mercedes plans to weed out lower-margin vehicles in favour of more profitable G-Wagon SUVs and performance models.

The EQE SUV, which will be manufactured at Mercedes’ US plant in Alabama, made its debut at the Musee Rodin in Paris ahead of a show lacking many western car makers, including Volkswagen and BMW.

Among those filing the void will be Chinese manufacturers led by BYD, the country’s biggest EV maker.

China’s EV manufacturers are increasingly seeking to make inroads into Europe.

This month, Nio announced plans to start sales in Germany, Denmark, Sweden and the Netherlands after modest success in Norway. Great Wall Motor and Seres Group also are part of the Chinese contingent exhibiting at the Paris show.

After many false starts by Chinese brands over the years, the transition to EVs could pry open the door to competitive European markets. British brand MG, owned by China’s SAIC Motor, last year sold about 40,000 vehicles in Europe.

The car makers proffering shiny new models in Paris are contending with low consumer confidence amid surging inflation and rising interest rates.

While its archrival BMW recently warned orders have started to slow, Mercedes said last week that sales jumped by 21 per cent during the third quarter, with China leading a strong showing of growth across all key regions.

In an interview with Bloomberg Television, Mr Kallenius called the third-quarter deliveries “robust” and said that while the economy “might cool down”, Mercedes will be prepared.

“We are also looking at finishing this year off in a robust fashion, and then we will see what next year brings,” he said.