BMW, Mercedes launch biggest EV push yet to catch Tesla with new models
BMW took the wraps of the Vision Neue Klasse electric vehicle at the IAA motor show in Munich, Germany. It underpins BMW’s big push into electric vehicles.
BMW
MUNICH, Germany — BMW and Mercedes are making their biggest push yet into electric cars in a bid to fend off rising competition from Chinese players and catch up with U.S. giant Tesla.
In the last few days, as part of the IAA Mobility motor show in Munich, Germany, the auto giants took the wraps off electric concept cars and new platforms for their future battery-powered vehicles.
European carmakers, which have been perceived to be behind Chinese companies like Warren Buffett-backed BYD and Elon Musk’s Tesla, have had to move quickly to show the market they’re ready to be major players in the electric era.
On Sunday, Mercedes-Benz unveiled its Concept CLA Class, an electric vehicle built on a new architecture that will underpin future battery cars from the German auto giant. The company said the concept car has a range of 750 kilometers (466 miles) as well as an ability to reach a range of 400 kilometers with just 15 minutes of charging.
Mercedes CEO Ola Kallenius talked up the car, calling it a “revolutionary development” for the German firm.
“With those efficiency numbers, that kind of range, that kind of fast charging, I am not aware of any vehicle, in that class that can match that,” Kallenius told CNBC’s Annette Weisbach on Sunday.
On Saturday, rival BMW showed off the “Vision Neue Klasse,” another electric concept car that highlights the company’s EV ambitions. Neue Klasse is BMW’s new architecture for its EVs. The first vehicles based on this platform are set to enter production in 2025.
“In only two years’ time, these cars will hit the road and with that, overall, we lead BMW to a new era of innovation and sustainability. That’s the purpose of our show here at the IAA,” BMW CEO Oliver Zipse told CNBC’s Arabile Gumede.
Zipse said BMW is going to double its EV sales this year. By the end of 2023, 15% of BMW’s global sales will be battery EVs, he added.
Mercedes and BMW’s dedicated EV platforms are a departure from previous architecture where they would adapt combustion engine or hybrid models and add batteries. This is the companies’ biggest push yet toward a new platform for the electric vehicle era.
Analysts said that Mercedes and BMW’s announcements are big steps but might leave them still lagging behind Tesla.
“The new platforms at Mercedes and BMW showcase, for the first time, what the European OEMs [original equipment manufacturers] will be capable of. These cars are likely still a year away, but their specifications show that European OEMs will be able to create compelling products,” Daniel Roeska, senior research analyst at Bernstein Research, told CNBC via email.
Roeska said that these new platforms “will close a large portion of the gap” to Tesla and the Chinese players, “but not all the way.”
Price war in focus
BMW and Mercedes are wading further into an increasingly competitive electric vehicle market, broadly dominated by Tesla and various Chinese players.
Tesla commanded 20% of the global EV market in the second quarter, followed by 15% for BYD, according to Counterpoint Research.
And the competition has become more fierce thanks to a price war largely sparked by Tesla. The U.S. automaker began cutting prices in 2023, vowing to sacrifice margins in the short term for market share gain.
Mercedes and BMW both play in the premium segment of the market, where cars like Tesla’s Model S and Model X compete. As they prepare to release more EVs in the coming years, Mercedes maintains its focus is not on pushing large volumes.
“We are not pushing volume, we are focusing on value over volume,” Kallenius said.
Meanwhile, Volkswagen’s strategy appears to be to release cars at various prices to capture different segments of the market.
The company announced Sunday that it will launch eleven new all-electric models by 2027, underscoring its EV push. In 2026, Volkswagen said it plans to launch the ID. 2all, an electric vehicle that will sell for less than 25,000 euros ($26,942).
The German auto giant showed off the ID. GTI Concept electric vehicle at the IAA show, and said a production version of the car is scheduled to hit the road in 2027.
Tesla, China dominate with tech in focus
In a world where batteries are powering cars, it’s not just design of the car or the engine that is going to win over consumers. Technology is increasingly important.
“Premium EVs now need to resemble smartphones more than traditional cars to offer a similar experience to Tesla – the gold standard in EVs with its vertically integrated platform,” Counterpoint said in a note last week.
Indeed, Tesla has built its business on controlling the hardware – the car itself – as well as the software that goes inside it. Musk often talks up the company’s Autopilot features which allow the car to carry out some driving features autonomously. Tesla’s large internal screen and apps make it feel more akin to using a smartphone.
Many of the Chinese automakers including upstarts Xpeng and Nio also market their semi-autonomous driving features.
At the IAA conference, incumbents have also been talking up their tech prowess in a bid to show they too can match Tesla and the Chinese start-ups.
For example, BMW said its Vision Neue Klasse EV has a heads-up display that projects information on the driver’s windscreen.
BMW CEO Zipse said that the Vision Neue Klass represents the “largest investment” in a car on the “digital side,” which includes semiconductors.
“This is a completely digital feeling to the car,” Zipse said.
Paradromics scientists at work
Source: Paradromics
Texas-based neurotech startup Paradromics on Wednesday announced a strategic partnership with Saudi Arabia’s Neom and said it will establish a Brain-Computer Interface Center of Excellence in the region.
Neom is a developing area within northwest Saudi Arabia that’s touted as “a hub for innovation,” according to its website. The area’s strategic investment arm, the Neom Investment Fund, led the partnership. Paradromics declined to disclose the investment amount.
Paradromics is building a brain-computer interface, or a BCI, which is a system that deciphers brain signals and translates them into commands for external technologies. The company will work with Neom to “advance the development of BCI-based therapies” and set up the “premier center for BCI-based healthcare” in the Middle East and North Africa, it said in a release.
“Working together, we can accelerate the rate of innovation in BCI and expand access to impactful BCI-based therapies.” Paradromics CEO Matt Angle said in a statement.
Paradromics is one of several companies racing to commercialize BCIs, including Elon Musk’s startup Neuralink. Earlier this month, Neuralink announced it has implanted three human patients with its technology, according to a blog post. Precision Neuroscience and Jeff Bezos and Bill Gates-backed Synchron have also implanted their systems in humans.
None of these companies have secured the FDA’s final stamp of approval.
Paradromics’ BCI, the Connexus Direct Data Interface, is an array of tiny electrodes designed to be implanted directly into the brain tissue. The system could eventually help patients with severe paralysis regain their ability to communicate by deciphering their neural signals.
The company is gearing up to launch its first human trial this year, and announced its official patient registry in July. Paradromics’ technology has not yet been approved by the U.S. Food and Drug Administration, and it still has a long way to go before commercialization. In 2023, the company received the FDA’s Breakthrough Device designation, which aims to help accelerate the go-to-market process.
Watch: Inside Paradromics, the Neuralink competitor hoping to commercialize brain implants before the end of the decade
Mark Lenhard, CEO of U.K.-based remittances platform Zepz.
Lukas Schulze | Sportsfile for Web Summit via Getty Images
LONDON — British digital remittances company Zepz is laying off dozens of IT workers and is in the process of closing down business units in Poland and Kenya.
Roughly 200 staff members will be impacted by the redundancy measures, two employees who were made redundant told CNBC, asking to remain anonymous due to the sensitivity of the matter.
As of January, London-headquartered Zepz — formerly known as WorldRemit — had a global headcount of 1,000 people, meaning the redundancies affect around 20% of its total workforce.
The layoffs affect several IT functions at the company, including database administration, development operations and software engineering, the former employees said.
Zepz confirmed to CNBC that it was reducing headcount in order to “sustainably support the next phase of long-term strategic goals and continued growth.” The company declined to comment on the number of employees impacted by the layoffs, with a spokesperson explaining that the redundancy process was ongoing.
“Following the successful completion of its replatforming efforts, bolstered by advanced automation and AI, Zepz has embarked on a strategic initiative to optimise operations across the organisation,” a Zepz spokesperson told CNBC by email.
“This transformation has reinforced the technology foundation and reduced the need for certain operational and technical capacities, prompting a proposed reduction in roles as part of the overall plan,” the spokesperson added.
Zepz has been touted as one of Britain’s fintech darlings. The company was founded by Ismail Ahmed, a Somalia-born British entrepreneur who fled the country during the Somali Civil War. Ahmed today serves as the company’s non-executive chairman.
The group was renamed Zepz following the acquisition of money transfer platform Sendwave in 2020, with the brand and WorldRemit coming under one parent company.
‘Difficult choice’
CNBC obtained a company memo announcing the cost-cutting measures shared by Zepz CEO Mark Lenhard internally in January.
“Today we are announcing a very difficult decision — proposed reductions in our team across all HQ functions, and most regions. And specifically we are proposing the closure of our Kenya and Poland employing entities,” Lenhard said in the memo.
Zepz touts itself as a “remote-first employer,” with regional offices in Kenya and Poland.
“This is a difficult choice, which impacts the lives of our colleagues and friends. This is also a choice which is critical to the success of our mission to serve immigrants everywhere. Both facts are true, at the same time,” Lenhard said.
“To be clear, this is not a change of strategy. We’re doubling down on our mission in an effort to expand our impact faster,” he added. “In some places, this will mean we’ll need to continue to ruthlessly prioritize. In others, we’re going to get more efficient. In many cases it will involve rethinking how we do things today.”
Zepz’s spokesperson insisted that the IT worker layoffs “will not impact customers in any region or market,” and added that the firm “remains committed to its mission of serving migrants worldwide, driving innovation, and delivering meaningful financial solutions to millions globally.”
This isn’t the first time Zepz has cut a spate of roles to save on costs. In 2023, Zepz laid off 420 employees, which accounted for about 26% of its global headcount at the time. Later that year, Zepz slashed a further 30 roles across its people and marketing functions.
Zepz has long been touted as a potential IPO candidate, but a timeline for this is unclear. Counting the likes of Accel, TCV and Leapfrog as investors, the startup was valued at $5 billion in 2021. The company announced a $267 million funding round last year.
Zepz faces competition from several notable digital payments players including PayPal, Wise, Revolut and Remitly.
WATCH: We now have ‘a whole generation’ of fintechs preparing for IPOs, says QED Investors’ Nigel Morris
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