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In early September, the Mercedes-Benz Group revealed plans to invest RMB14 billion (USD2 billion) in the Chinese market in collaboration with its Chinese partners. This investment is set to support the development of two new platforms, as well as the introduction of models exclusive to China, with the goal of enhancing its lineup of passenger cars and light-duty vehicles to boost sales in the region.
The move reflects the growing pressure legacy carmakers face in China, the world’s largest electric vehicle market, where local manufacturers dominate. Other automotive giants, such as Volkswagen, have also laid out bold strategies to regain market share and improve sales in this highly competitive environment.
Where are the funds going?
Mercedes-Benz will channel the investment along with its joint venture partners, BAIC and FAC. Approximately RMB10 billion (USD1.4 billion) will be allocated to passenger cars, while the remaining RMB4 billion (USD550 million) will go towards the development of light-duty vehicles.
The MMA and VAN.EA platforms
Starting in 2025, Beijing Benz, Mercedes-Benz’s joint venture with BAIC, will begin producing vehicles based on the MMA (Mercedes-Benz Modular Architecture) platform. One of the first models will be a new long-wheelbase CLA battery-electric sedan, tailored specifically for Chinese consumers. This model will feature 800-volt electrical architecture and a two-speed gearbox.
In the future, Mercedes-Benz will introduce the modular and scalable VAN.EA platform for light-duty vehicles. While specific timeline details remain undisclosed, Fujian Benz, its joint venture with FAC, will release a luxury pure-electric MPV based on this platform.
A new exclusive long-wheelbase GLE SUV model for China
In addition to the above, the investment will support the development of a new long-wheelbase GLE SUV, designed exclusively for the Chinese market. Developed mainly by the Mercedes-Benz China team, this luxury SUV will be produced locally and will offer Chinese consumers advanced intelligent technologies along with enhanced comfort. It will join the six Mercedes-Benz SUVs already manufactured in China.
The MB.OS
In 2025, Mercedes-Benz plans to introduce its newly developed MB.OS (Mercedes-Benz Operating System) architecture in a model based on the MMA platform. The system features the latest MBUX (Mercedes-Benz User Experience) virtual assistant, with 3D graphics and powered by a large language model. The MB.OS will also debut the company’s first fully integrated intelligent driving system, capable of handling various driving scenarios.
Rho Motion’s Evaluation, non-China OEMs struggling in the world’s biggest EV market
Historically, non-Chinese OEMs performed well in China with ICE vehicles. However, the shift to EVs has disrupted this trend, with EV sales not reflecting the dominance previously seen with ICE vehicles. Legacy automakers like Mercedes-Benz, focused on maintaining their existing product lines, have struggled to keep up with the rapid pace of EV innovation, particularly in China, where the market is increasingly driven by advanced, intelligent EV technologies.
As a result, legacy OEMs have sought partnerships with local Chinese players to stay competitive. Notable examples include Volkswagen’s collaboration with Xpeng, Stellantis with Leapmotor, and Audi’s partnership with SAIC.
With its latest investments, Mercedes-Benz is aiming to remain competitive in this fiercely contested market by embracing innovation and strengthening its presence in China’s rapidly evolving EV landscape.
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Image Credit: Adobe Stock
Sources: Mercedes Benz
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