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Mercedes-Benz EQS in the U.S. Is Cheaper Than the S-Class to Convert the Rich

If you have read our article about the Mercedes-Benz EQS pricing in the U.S., you know it gives the impression that the German automaker has cracked EV production cost parity with ICE vehicles. If that is really the case, only Mercedes-Benz knows about that for sure. This article wants to offer a different perspective. The lower price of the EQS compared to the S-Class seems to have a clear objective: convincing S-Class owners to make the shift to EVs, even at an initial loss for Mercedes-Benz.
Mercedes-Benz EQS 25 photos
Photo: Mercedes-Benz
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That is easy to demonstrate by comparing the company’s electric vehicles’ prices to those of equivalent Mercedes-Benz ICE cars in Germany. The EQS will be the first fully electric vehicle from the German brand for sale in the U.S, and that is also on purpose.

The EQA is a GLA with batteries. While the GLA starts at €37,812 ($43,579 at the current exchange rate) in Germany (including taxes), the lowest price for the EQA is €47,540 ($55,719). The story repeats itself with the EQC (€66,068, or $77,434) against the GLC (€48,141, or $56,424). Prices for the EQB have not been released so far. However, they should follow the same logic: the electric version is (still) more expensive.

It is not just a matter of battery packs being costly components. Mercedes-Benz also does not have the same production scale for them, which would help drive prices down. Until it does, it may probably lose money in each EV it sells, although that can be compensated by bringing down carbon emissions in Europe for the brand. That prevents it from paying hefty fines to the European Union. It is a matter of deciding where the company will lose less money.

If that is the current standard, the EQS should be no different. It sure is the first electric car Mercedes-Benz builds meant to run on batteries, not just an adapted ICE platform, as the other EQ vehicles so far. However, the advantages the dedicated electric platform EVA2 – future MB.EA architecture – could bring to cost depend on scale and time to emerge.

While they don’t, the EQS should be more expensive than the S-Class. It won’t be because luxury car buyers tend to be very conservative. S-Class owners buy them for ages and even order future generations of the car without even seeing them.

The S-Class is regarded as the epitome of luxury on wheels – the top of the automotive “food chain.” Hyundai used to have an S-Class in front of its development center. It was the benchmark for the best car in the world. Mercedes-Benz acknowledges that by pricing the EQS as a more affordable vehicle and invites its usual customers to give it a try. Ola Källenius said the EQS would make a profit from day one, but he did not say where.

It may sound weird that a car for rich people tries to seduce them with a discount, but the truth is that everybody loves a bargain. Besides, wealthy folks that got there on their own did so by striking good deals. Make no mistake: the ones that just spend money as if there was no tomorrow are just temporarily on the black.

For the German carmaker, convincing these customers to try the EQS is a must: the company pledged to kill combustion engines until 2030. What will Mercedes-Benz sell to its loyal S-Class customers when it cannot put a V12 or a turbocharged V8 under the hood of its most praised product?

In a way, Mercedes-Benz would probably be better off if it was starting with a clean sheet, like Tesla did and Rivian and Lucid will soon follow suit. Rivian is not fighting for the same customers as the German brand. Tesla was only regarded as a luxury brand because of the prices it charged for the Model S. However, Lucid eyes precisely the customers that would buy an S-Class.

Yes, the EQS is the most aerodynamic vehicle in the world, but its design was not well received by everyone. It also has a massive screen and other gadgets that will appeal to younger clients, but Lucid followed a more elegant approach. Most reviews said the interior of the Air is spotless.

Offering its adapted EVs in the U.S. first would probably give customers a bad impression. They are used to Teslas, will soon be able to buy a Lucid Air, and know what an electric car conceived as such can offer. If Mercedes-Benz is to attract attention from American customers, it has to be with a superior product, and the company knows the EQS is the first one about which customers in the U.S. would say so.

Others may follow later, such as the EQB will in 2022, but the EQS will have already ensured a good first impression. Still, it will be tough. Although the EQS had an impressive range of 478 miles (770 kilometers) under the WLTP cycle, Lucid scored 520 mi (837 km) under EPA with the Air.

In other words, Mercedes-Benz is not competing solely with its traditional opponents and apparently competent newcomers: it also has to overcome its own legacy. The good news for the company is that it has more control over this, but that does not mean it will be an easier challenge. Offering a discount may help it do the trick.
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About the author: Gustavo Henrique Ruffo
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Motoring writer since 1998, Gustavo wants to write relevant stories about cars and their shift to a sustainable future.
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