BBA's Pure Electric Anxiety, China Market Can't Resolve

At the recently concluded Munich Motor Show in September, BBA (BMW, Mercedes-Benz, Audi) unveiled their most significant pure electric models. Although most of these products have not yet entered mass production, the frequent moves and competitive positioning among them clearly convey the urgency and anxiety of the three German giants in their transition to electrification.

From a timeline perspective, BMW's "New Generation" first mass-produced model, the BMW iX3, which took five years to develop, made its global debut in Munich, with the Chinese version set to launch next year. Mercedes-Benz showcased the pure electric version of its best-selling GLC, which will also be locally produced next year. Audi, on one hand, presented the pure electric concept sports car Concept C that will enter mass production in 2027, while on the other hand, the Audi E5 Sportback, developed by SAIC Audi, was officially launched in China on September 16.

Various parties have already had several rounds in the public opinion arena. Mercedes-Benz design director Gordon Wagener, in a rare outburst during an interview with the British magazine "Top Gear," directly criticized the interior design of competitors for having serious issues. He criticized the Audi Concept C's central control screen as being "too small and lacking a sense of technology," while BMW's 43.3-inch panoramic iDrive display was "too big, too far, and distracting."

Recently, numerous media outlets reported that Mercedes-Benz and BMW would establish a strategic partnership, with Mercedes-Benz procuring powertrains from BMW to meet the stringent Euro 7 emissions standards, particularly for plug-in hybrid models. However, just a few days later, Markus Schaefer, Chief Technology Officer and member of the Board at Mercedes-Benz, publicly refuted these reports, stating that they were untrue, while reaffirming the brand's commitment to its own powertrain lineup.

Markus Schäfer also announced that Mercedes plans to phase out the EQ brand and will no longer use separate naming formats like "EQA, EQE, EQS." In the future, its electric vehicles will adopt a simpler naming strategy that directly integrates into the main brand, using "Electric" in their names. The reason for this adjustment is that the EQ series names are too long, do not align with the current naming trends of new energy vehicles, and cannot clearly distinguish from fuel-powered models.

Mercedes-Benz has restructured its naming system, Audi has launched a new brand "AUDI" without the classic "four rings" specifically for China, and BMW has unveiled its "New Generation," a significant turning point in its electrification process that has been five years in the making... These German automakers are all making major moves this year, and their anxiety stems not only from competition with Chinese car companies.

The Chinese market is not the source of anxiety for BBA.

"It is not a simple product introduction, but a true systematic response originating from China and born for Chinese users," said Song Feiming, CEO of the Audi-SAIC cooperation project, to the media when introducing the Audi E5 Sportback.

"We (Mercedes-Benz) have already established ourselves among the top ranks in the electric vehicle sector, so we have no reason to fear China," Markus Schäfer publicly declared.

"The New Generation is not just a car; it will become a product family in the future, all inheriting the genes and innovative technologies of the New Generation. In facing the Chinese market, we always approach car manufacturing with a sense of reverence, listening to every pulse of the market and paying tribute to every local competitor. Because we deeply understand that only in this way can we truly understand China," said Jochen Goller, a board member of BMW Group, to the media.

Whether to passively defend against the competition from Chinese electric vehicles or to actively seize market share in China, everyone understands the true intentions behind BBA's recent moves in pure electric products. Despite the fact that the latest models from Mercedes-Benz and BMW have been uniformly criticized for their appearance by overseas netizens:

"Both cars are ugly... If the GLC didn't have that big grille in the middle, it would be acceptable. The BMW looks like a bloated angry bird."

"Mercedes looks like Gucci pants, covered in logos. It screams: 'Look! This is Mercedes! Mercedes! Look! Look! I have a Mercedes! Look! Look!'"

"In my opinion, these two renderings both look like they were made by the company as an April Fool's joke."

However, overseas netizens believe that such designs are intended to cater to the preferences of Chinese consumers, as these products coincidentally focus on the selling points that the Chinese market values: long range, spaciousness, fast charging, and intelligence.

"This is catering to the Chinese market, which prefers larger grilles. European car manufacturers are simply following the directives from the region with the highest demand for their vehicles."

The fact is that Chinese netizens do not fully accept the appearance of either. They generally think that the interior of the new generation BMW iX3 is cool, but the large nostrils on the front are too strange; opinions on Mercedes' large grille are mixed, and many people believe the taillights are a design flaw.

The desire to create an electric car that resembles an electric vehicle may be the reason behind these controversial designs.

BBA is indeed feeling the urgency to advance its electric vehicle process. In the first half of 2025, Mercedes-Benz's pure electric vehicle sales reached 87,300 units, a year-on-year decline of 14%, accounting for only 8.1% of its total sales. Audi delivered 101,000 pure electric vehicles, achieving a year-on-year growth of 32%, but its sales share was only 12.9%. Meanwhile, BMW's cumulative delivery of new energy models reached 318,900 units, accounting for 26%. However, compared to China's 47% penetration rate of new energy vehicles, there is still a significant lag.

The slow transition to electrification, declining sales in the Chinese market, and plummeting profits... this is the common narrative for BBA in the first half of the year. Looking solely at the August sales data from the Chinese market, BMW's total monthly sales of pure electric models, excluding MINI, were only 3,329 units. Mercedes-Benz's total sales for all pure electric models (EQB, EQA, and EQE) did not exceed 900 units; Audi's cumulative sales of pure electric models did not exceed 400 units.

This data actually reflects that the Chinese market is not the source of recent anxiety for BBA, as their pure electric vehicle sales in China have been consistently flat. The real pressure comes from Europe: the EU's "2035 full electrification" goal is approaching, while market acceptance and infrastructure are far behind. In contrast, the Chinese market is an important outlet for solving their urgent issues.

At the automotive summit on September 12, European car manufacturers once again urged the European Commission to reconsider and amend the "2035 full electrification" target. The core argument of the car manufacturers is "insufficient transition time" — from 2020 to 2024, the share of plug-in vehicles in Europe only increased from 11% to 24%. At this rate, it would be difficult to achieve the 100% electric target by 2035. However, the EU believes that during the same period, the share of plug-in vehicles in China jumped from 5% to 47%, proving that "a faster transition is entirely possible." They argue that it is just that European car manufacturers are unwilling to make an effort and remain steadfast that the 2035 target will not change.

European car manufacturers have always been somewhat reserved about electrification, largely because the infrastructure development outside of China is not keeping pace with the electrification process. Oliver Zipse, Chairman of the Board of Management of BMW Group, stated that Germany needs 30 to 40 years to equip and expand the power grid to achieve this goal. "People completely overlook that this cannot be achieved with just a little money." Volkswagen and Stellantis have stated that the goal is "unrealistic" and "unachievable."

Martin Bruckner, an energy expert from the raw materials database Matflixx, pointed out: "In regions like Africa, and many other places, electrification may never be achievable in the foreseeable future." This, in addition to high production costs, is also a reason why many car manufacturers are slowing down their electric vehicle plans.

With only 10 years left until the policy is implemented, markets outside China lack the capacity to absorb. Delaying is no longer an option, and BBA can only turn its attention to China—even though the competition is fierce, there is no other choice.

The "medium content" of BBA is getting higher and higher.

On September 16th, the Audi E5 Sportback, co-developed by Audi and SAIC Audi, was officially launched, with prices ranging from 235,900 to 319,900 yuan. Within 30 minutes of its launch, orders exceeded 10,153 units. The E5 Sportback features Audi's chassis and handling, and has collaborated with Momenta in terms of intelligence. The market response has already validated the feasibility of this localization approach.

BBA's cooperation with Chinese enterprises is becoming increasingly close. Currently, Audi China has established a partnership with Huawei to implement Huawei's ADS system and HarmonyOS cockpit applications; FAW Audi is collaborating with CATL to create batteries, with CATL focusing on cell research and development, while Audi independently designs the battery pack system.

Mercedes-Benz and Geely have jointly launched the high-end electric smart car brand smart; they have reached a collaboration with AI platform iFLYTEK to focus on voice product development; they are collaborating with Tencent in the fields of cloud computing, big data, and artificial intelligence technology; the 2025 model CLA will be equipped with ByteDance's Doubao large model; there are also reports in the second half of the year that they have preliminary plans to cooperate with Geely Automobile to develop a plug-in hybrid system solution for this new car.

BMW began collaborating with CATL in 2012, and now both parties are jointly advancing the mass production of large cylindrical batteries, which will be applied to new generation models. In terms of intelligence, BMW has established a deep cooperation with Huawei around the HarmonyOS ecosystem this year, and has also collaborated with Alibaba in the fields of artificial intelligence large language models and intelligent voice interaction technologies. Additionally, it announced a joint development with Momenta for a new generation of driver assistance solutions aimed at the Chinese market.

Not only is there a "moderate level" of collaboration, but internal power is also shifting towards the Chinese team. In a media interview, BMW's Gao Le stated that the Chinese team can independently decide on the level of ADAS launch, user experience, and interface design. "In the future, we hope to delegate more power to the local team in China, such as the autonomy over interior design. Chinese consumers have many high standards and diverse demands for the comfort and functionality of rear seats, which is very unique in the global market."

Mercedes-Benz has entrusted the 2025 long-wheelbase GLE SUV to a Chinese team, with an extended wheelbase, optimized rear seats, and smart technology customized by the local team. Audi has even partnered directly with SAIC Audi to launch a new brand "AUDI" led by a Chinese team, aimed at the Chinese market.

However, the problem remains: even if these products are more localized, they may not surpass Chinese domestic electric vehicles in terms of range, space, and fast charging. Furthermore, the reliance on partnerships for smart technology dilutes their own uniqueness. More critically, no matter how large the Chinese market is, it cannot solve the structural challenges of a slowdown in global electrification.

In other words, the "content level" of BBA is increasing, but their anxiety has not diminished. What truly suffocates them is not China, but the unavoidable policy red lines that are getting closer and closer.