Paris Motor Show

Tesla Followers on Parade

Autosalon Paris – Erster Pressetag
Daimler CEO Dieter Zetsche in his new look at the Paris Motor Show.
  • Why it matters

    Why it matters

    A number of carmakers have jumped on the electric car bandwagon, announcing new projects at the Paris Motor Show.

  • Facts


    • Daimler said it would be launching a new e-car brand and pledged to be leading the sector by 2025.
    • Volkswagen, BMW and Opel all have their own new e-car agendas as well.
    • At the moment, only the California startup Tesla produces premium e-cars.
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Dieter Zetsche has already completed the personal transformation to go along with Daimler’s new image.

The chief executive’s arrival on stage at the Paris Motor Show was decidedly casual, complete with washed denim and brown sneakers. He spoke about networking, car sharing and digital transformation. And then he got down to business: “We are launching a completely new brand for our e-cars,” Mr. Zetsche said. By 2025, “we will be the leading producer of e-cars in the premium segment.”

It’s a bold statement, because currently only U.S. startup Tesla produces premium e-cars. But now Daimler appears to have flipped the switch.

Next year will see all of Daimler’s Smart models equipped with electric drive. A “parent brand” will follow in 2019, the company announced. A fully electric off-road vehicle on the basis of the GLC utility vehicle model is to be launched under the label “GQ,” and half a dozen further e-cars are to follow. And then, in just 10 years, between 15 and 25 percent of all Mercedes and Smart models sold are to be fully electric. That would mean up to half a million e-cars per year.

Daimler’s announcement fits into the overall picture, with manufacturers at the Autosalon Paris all trying to outdo each other with announcements about new e-cars.

Volkswagen is presenting its concept study “ID” there. An electric Golf model is also planned to hit the market in four years. And on Thursday, the BMW supervisory board met in Munich to discuss “electrifying” the Mini small car brand, the X4 and the 3-series in addition to the electric “i3” model it has already introduced.

And then there’s Opel, whose Ampera, created together with parent company General Motors, was long an industry forerunner. The European subsidiary now wants to extend the range of its e-car to 500 kilometers, or 310 miles.

“Elon Musk has been successful at marketing e-cars as luxury products. I am convinced we can make up for the time lag.”

Dieter Zetsche, Daimler CEO

The Autosalon in Paris will be remembered for “initiating the change from the combustion engine,” said car industry guru Ferdinand Dudenhöffer, of the University of Duisburg.

And the host city is showing the way forward. From 2020 the registration of automobiles with diesel engines is to be greatly reduced, according to Paris Mayor Anne Hidalgo. In Germany, the Green Party is calling for all combustion engines to be prohibited by 2030.

But above all, automobile manufacturers are reacting to the market success of the rival Tesla, which already has 400,000 advance orders for its planned Model 3 – a shock for the established players.

“Elon Musk has been successful at marketing e-cars as luxury products,” said Mr. Zetsche of Tesla’s founder. But the fact that his rival already has e-cars, which Daimler won’t have for another three years, does not bother him. “I am convinced we can make up for the time lag,” said the Daimler boss, who also doubts that Tesla can sustain its loss-making business model with repeated new rounds of financing. “It can all end abruptly,” he said.

“When we get serious, then in a few years nobody will be talking about Tesla.”

German car company manager

Daimler’s maneuvering is typical of German manufacturers. Since the turn of the century, the company has tinkered with electric drive and fuel cells, only to keep coming back to the old favorites: diesel and combustion engines. But in 2009 Mr. Zetsche had a good idea: In the middle of the financial crisis Daimler invested in Tesla motors, which at the time was an e-car startup on the verge of bankruptcy.

Tesla learned a thing or two from its new investor about car construction, and Daimler was amazed at the startup’s boldness of letting embryonic technology anywhere near customers. And yet the two companies parted ways: In October 2014, Daimler sold its remaining Tesla shares for €780 million (current value $877 million), more than 10 times its original investment.

This was also a shot across the bow of Bavarian rival BMW. The latter had invested €3 billion in the development of the “i3,” which is made of carbon fiber and launched in 2013. So far, i3 sales figures have been sobering: Just in the first half year of 2016, sales were down by 12.2 percent, and production is working at way below capacity levels. Customers were impressed by neither its modest range, nor its design. Since August, the “i3” does have new batteries and a range of 300 kilometers, but the model will probably never be an item for mass production.

“It is not clear how quickly the new technology will be on the market,” said Ian Robertson, BMW’s board member for marketing. Mr. Robertson had come to Paris directly from the BMW strategy conference in Munich with the executive and supervisory boards.

Like Daimler, the BMW think-tank is discussing a plan to equip existing models like the “3-series” with an electric drive. “It is the subject of intense discussions,” said Mr. Robertson, implying that a consensus had not yet been reached in Munich.

One thing is clear: The days of the “alibi e-car” are gone. It’s becoming part of the core business instead.

Volkswagen is a prime exampe, even if it’s own shift may have been sped up by the Dieselgate scandal involving the rigging of software in diesel engines. In Paris it announced plans to equip its Golf “ID” with a range of 600 kilometers and as much inside space as its bigger Passat model to make up for the missing combustion engine.

“That is our reply to Tesla,” said VW-brand boss Herbert Diess. By 2025, VW alone is set to produce one million e-cars per year, “which would make us global market leader,” said Mr. Diess.

The Germans are launching their offensive as what they call “fast followers”: While Tesla continues to make high losses and has problems making deliveries on orders for its successful models “Model X” and “Model 3,” Daimler, BMW and Volkswagen aim to exploit their ability to adapt new technologies quickly and get them out on the market in big numbers. High-quality mass production is their trump card.

“When we get serious,” whispered one German car manager this week, “then in a few years nobody will be talking about Tesla.”

One thing is clear: German carmakers have certainly never lacked self-confidence.


Markus Fasse covers the aviation and automobile industry for Handelsblatt. Stefan Menzel is the managing editor of Handelsblatt’s website and closely follows the car industury. To contact the authors:,

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