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Daimler’s frontal attack on Tesla

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With the new fully electric luxury sedan EQS, Daimler wants to make up for the gap to the electric pioneer Tesla. Strong quarterly figures provide momentum. But the US rival has a big lead.

“Tesla Hunters”, “Tesla Fighter” or even “Game Changer”: Industry experts and the media are praising the new fully electric Daimler luxury sedan EQS, which celebrated its world premiere yesterday. The Mercedes-S-Class is by far the most important and prestigious model series for the car manufacturer – a calling card for the car-interested world, with which one wants to present oneself from the best side and at the height of the engineering art. In the autumn of last year, the carmaker had already presented the S-Class with internal combustion engines. But that was yesterday’s world. The future, and actually the present, belongs to electromobility. And here the US competitor Tesla set the pace with its Model S in recent years.

Overslept the future?

According to Daimler’s plans, that should change from now on. “The EQS was developed to exceed even the expectations of our most demanding customers,” says CEO Ola Källenius, promoting the new luxury model. Above all, the management is concerned with catching up on the competition with Tesla at the top. “The importance of the EQS for Daimler’s reputation as an e-car builder is immense,” said industry expert Ferdinand Dudenhöffer Deutsche Welle . The new vehicle is both a technology carrier and a symbol of the Group’s ability to innovate. For a long time, critics have accused the group of lacking innovative strength. For too long, Daimler has stuck to the concept of gasoline and diesel cars, while Tesla has long been shaping the future and building a technological lead that needs to be caught up now.

From now on it should go faster

Tesla is also way ahead in terms of sales in the electrical sector. Last year, the Californian company set a new record with almost 500,000 vehicles sold worldwide. In the first quarter of 2021, the share of e-cars in total sales was only ten percent, but this sector is currently growing strongly. According to the current status, Daimler is aiming for a sales share of electrified cars of “more than 50 percent” in its passenger car division by 2030. This includes both all-electric cars and hybrids. According to Källenius, it could also be faster. At the moment you can feel a “strong demand” for purely electric cars and hybrid vehicles, he said at the presentation of the new electric sedan. If you project this momentum into the future, “it may well be that the planning bases that we have had so far are perhaps too conservative, that things can go faster, that things can be more.”

Tesla still has a head start

The fully electric EQS ​​should go on sale from summer. The price is not yet known. Jürgen Pieper, auto expert at Bankhaus Metzler, reckons with a proud price of 150,000 euros. With a range of 770 kilometers and the ability to charge quickly, Daimler’s EQS will be Tesla’s most important challenger, commented Kai Alexander Müller, Barclays auto analyst. The second generation of Tesla’s Model S, announced for this year, should travel 660 kilometers without having to recharge. Nonetheless, Tesla will remain unmatched for longer when it comes to software for communication and entertainment in the car, explained Metzler analyst Pieper. “Even the EQS does not yet offer as much as Tesla in terms of networking and constant software updates.” Nevertheless, the presentation is a success for Daimler: “The EQS is the challenge for pure electric car manufacturers, above all for the US electric car pioneer Tesla, says Stephen Reitman, analyst at Societe Generale.

Operating profit ninefold – investors enthusiastic

The Stuttgart-based carmaker is currently also receiving tailwind from the fresh quarterly figures that were published that morning. Earnings before interest and taxes (EBIT) rose to just under 5.8 billion euros in the first quarter. That was more than nine times the first quarter of 2020, which was marked by the outbreak of the corona pandemic – and more than experts had forecast. Daimler has not yet given information on sales and surplus, but it is clear that the group benefited in particular from the strong business in China. Daimler had reported a 22 percent increase in car sales for the first quarter, and sales soared by 60 percent in China alone. Investors like the latest news from Stuttgart. With a plus of almost three percent, the Daimler share leads the DAX.

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