LAS VEGAS—Most of the demand for Mercedes-Benz's upcoming electric EQC compact crossover is expected from Europe—so the auto maker is delaying the model's U.S. launch, Daimler CEO Ola Kaellenius said during the CES show in Las Vegas.
The EQC, which starts at $68,895, including shipping, was to have shipped to U.S. dealers in the first quarter. The launch into the world's second largest auto market has been delayed to 2021.
"We had to make a little bit of a tough choice," Kaellenius said on the sidelines of CES. "Demand (from Europe) by far outstrips supply, even though we are ramping up and adding additional battery lines to the production."
Mercedes expects to sell tens of thousands of the EQC, the brand's first mass-production EV, in 2020, Kaellenius said.
Mercedes is building the EQC at a plant in Bremen, Germany, where output is ramping up to reach 200 units a day, or about 50,000 vehicles a year.
Additional EQC production in China for that market began late last year.
The new urgency to capitalize on European demand followed the EU Parliament's mandate for a 37.5 percent cut in new-vehicle emissions by 2030.
That will require Europe's auto industry to dramatically slash fleet-average emissions levels to roughly 60 grams per kilometer on average or face steep noncompliance fines.
Tighter emissions regulations led Mercedes to decide "to go all in on Europe," Kaellenius said.
The EQC is the first of 10 EVs the auto maker intends to launch globally by 2022.
The crossover is powered by an 80-kilowatt-hour battery and has about a 280-mile range on a full charge, based on New European Driving Cycle estimates.
Two electric motors generate a combined 402 horsepower, enabling a 0 to 60 mph sprint in 4.8 seconds. To reduce power consumption, the front electric motor is optimized for efficiency in the low- to medium-load range, while the rear motor adds sportiness.
The U.S. delay means Mercedes will have to sit on the sidelines as rivals Tesla, BMW, Audi and Jaguar take an early lead in EVs stateside. Jaguar and Audi launched electric crossovers in the U.S. this year, though both models have struggled to gain traction—in part because of sharply higher pricing.
BMW will introduce the iX3, a midsize crossover, as well as the i4 and iNext in 2021. Tesla will launch the Model Y, a crossover version of its popular Model 3 electric sedan, also next year.
Adoption, cost issues
EV adoption in the U.S., which hovers at less than 2 percent of total sales, remains patchy.
"The U.S. is one market, but it's many markets," Kaellenius said. "You have little ecosystems like Silicon Valley, where you have a bunch of early adopters and a lot of things happen quickly."
Driving range, or the perceived lack of it, often is cited as a factor holding back EV adoption. But Kaellenius dismissed that concern, saying that "99 percent of all trips taken everywhere in the world per day is below 100 km."
A far more important factor in growing U.S. demand will be bringing down the cost of the vehicles, he said.
"By scaling production and developing technology further," Kellenius said, "step by step, costs will come down."