Luxury rivals BMW and Mercedes target Tesla and BYD with new electric SUVs

BMW and Mercedes are done watching Tesla play king. The two biggest luxury brands from Europe have just thrown down the gauntlet with all-electric SUVs meant to take back the market.

After Tesla’s Model Y exploded into the scene and crushed every legacy automaker’s pride, the Germans are now swinging back, with range, software, and billions in development cash, according to The Wall Street Journal.

As Cryptopolitan previously reported, BMW showed off its new iX3 at a splashy event, with CEO Oliver Zipse calling it a “once-in-a-lifetime moment.” Two days later, Mercedes revealed the electric GLC inside a damn royal palace in Munich, because why not?

Both launches were timed just before Europe’s biggest auto event, IAA Mobility. These SUVs are built to push out Tesla, shut down BYD’s quiet takeover, and rewire how buyers think about tech, design, and status in the EV era.

Mercedes roll out high-range tech-heavy SUVs

The GLC from Mercedes hits 457 miles. Both easily beat the long-range Tesla Model Y, which only gets 387 miles. That alone will pull attention fast, especially with EV buyers increasingly worried about range in the real world.

These cars are packed with chips, AI, and digital assistants. BMW teamed up with Qualcomm. Mercedes worked with Nvidia, plus Google and OpenAI. That combo lets the new GLC do stuff like open windows, find restaurants, and chat back using ChatGPT.

Tesla’s lead came from doing everything in-house. BMW and Mercedes, meanwhile, leaned on Silicon Valley to leap forward. It’s a different route to the same goal: smart, fast, digital cars. And it’s not just for EVs. This tech will eventually go into gas and diesel models too.

The two German SUVs aren’t cheap. BMW’s iX3 will sell for around $80,000 in Germany. The Model Y sits closer to $60,000. Mercedes hasn’t dropped a price yet, but it won’t be cheap either. That price gap reflects the brands’ target market. Tesla’s been cutting prices to chase volume. BMW and Mercedes want the rich nerds, the tech lovers with money to burn.

In the U.S., BMW is already luring “Tesla defectors,” according to its July investor update.

A Gartner index ranking “digital automakers” put Tesla in the number one spot. Mercedes came in 13th. BMW was 14th. That was a drop from last year, thanks to strong entries from China’s Xiaomi and Li Auto.

Analyst Pedro Pacheco, who wrote the report, said the new German EVs could help boost their rankings, once they’re actually on the road.

Europe, China, and the race to survive Tesla’s head start

That’s the other problem: time. Tesla had a head start. BYD, now the world’s biggest EV seller, isn’t standing still either. At the same Munich show, BYD’s Executive VP Stella Li announced that its Hungary plant will start production by the end of 2025.

“This shows we are in Europe to stay,” she said. The first car off the line will be the Dolphin Surf, a compact EV. BYD had earlier considered delaying that plant until 2026 and running it below capacity for two years. That’s now off. They’re speeding up instead.

And they’re not the only Chinese firm on the move. XPeng is shipping its new long-range G6 SUV to Germany for €47,600, about $55,800. That’s over $20,000 cheaper than the iX3, which is priced at around $80,000 in Europe. Mercedes hasn’t even announced GLC pricing yet.

Tesla, which once poached buyers from Mercedes and BMW, has been cutting prices to hold on to market share. It’s working for now, but BMW says it’s already luring the most Tesla defectors in the U.S. That’s not a good sign for CEO Elon Musk.

The longer Tesla acts like a political meme account and less like a car company, the more space it gives legacy brands to steal back loyalists.

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