These days, anything goes, and global automakers are suddenly prepared to break the chains of corporate ideology and go-it-alone dogma. Just look at Germany, where big players and former archrivals have quickly agreed to jointly purchase or combine mapping and car-sharing services, to help establish a Europe-wide fast-charging infrastructure, and to source virtually identical electric-vehicle batteries from the same suppliers. Last month, VW was first to slaughter another sacred cow by announcing its willingness to share its brand-new MEB electric-vehicle platform with third parties even before its first EV has gone into production. And in what is perhaps the most radical consolidation effort to date, BMW and Mercedes last year began discussing co-developing a pair of vehicle architectures. So far, no agreement has been reached, but the matter may be decided even before the M-B CEO Dieter Zetsche steps down in May.
The first models to be spun from this innovative, two-size modular architecture would be the 2025 1 Series and the next-generation Mercedes A-class (and its derivatives) due to go into production starting in in 2024. That timing won’t be affected as long as a decision on the project is made within the next 12 to 18 months. The cooperation aims to hedge against decreasing margins in an increasingly volatile market, as constant growth is key to profitability in such an environment. As an example, the business case for Mercedes’ current MFA small-car architecture is based on approximately eight million units sold over its life cycle, but it would lose money if that target was missed by a paltry 350,000 vehicles—less than five percent of total volume. Similar numbers apply to BMW’s UKL architecture, where discontinuing two or three Mini models that use the platform needs to be balanced by new products such as the 2 series Gran Coupe.
“In essence, this cooperation is a no-brainer,” states a BMW engineer and a member of the task force evaluating the joint venture. “Having said that, such a deal is of course also a highly political affair with the traditionalists on both sides being particularly skeptical.” However, accountants see economies of scale amounting to $2.9 and $5.7 billion—that’s per partner and per architecture, for a grand total of up to $8.5 billion saved for each company. The two architectures designated to revolutionize the business are labeled MX-1 for small to midsize vehicles (think 1 to 3 Series) and MX-2 for mid- to full-size cars (think E-class and up). Since many synergy effects are not restricted to vehicle segments and dimensions, the full savings potential can only be secured by streamlining all efforts and creating a fully scalable and standardized DNA. Brands that wouldn’t dip into this gene pool would be those currently in Chinese partnerships: Mini (with Great Wall) and Smart (with Geely).
To better understand what drives BMW and Mercedes to the conference table, it helps to examine the brands’ long-term cycle plans. BMW’s plan is based on an evolution of the recently introduced front-drive FAAR and rear-drive CLAR component sets, which can be fully electrified as demonstrated by the 2021 iNext. In contrast, Mercedes’ strategists have decided to split its EV efforts into vehicles that are spun from existing vehicles (EVA1, which underpins the EQA, etc.) and vehicles that are on a bespoke architecture (EVA2, which underpins EQE, etc.). Both of these approaches should be viable during the industry’s transition period between now and sometime after 2025, but once demand for EVs takes off, carmakers will need to embrace architectures that are centered around battery packs rather than fuel tanks for all their vehicles. So why not execute this radical rethink now, and achieve a common objective?
Differentiation Remains a Major Concern
M-B CEO-in-waiting Ola Källenius is said to be leaning toward approving the MX-1/MX-2 approach. For his part, BMW chief Harald Krüger needs to assess the savings potential of the evolutionary approach to the FAAR/CLAR platforms. According to representatives from both companies, the biggest bone of contention has always been—and remains—differentiation, however. For starters, making sure that related models from each automaker look, drive, and perform differently will cost each marque about $2.3 billion, which must be deducted from the balance sheet. To meet this absolutely imperative goal, maximum flexibility on all levels has priority over maximum communality. Everything you see and touch and feel needs to be bespoke in one way or another. Comments a member of the Mercedes delegation: “As a first step, we established a brand bible which lists the critical do’s and don’ts. Now we are in the process of separating the items that should be standardized from the elements that must not be.”
Establishing an R&D strategy that works for both parties is an arduous task. There isn’t an easy answer to anything, which includes a proposal to put BMW in charge of producing the compact to mid-size cars while Mercedes would assemble the mid- to full-size models. Irrespective of plant allocation and product portfolio, the starting point is said to be an innovative low-floor platform that would be fully variable in terms of content and dimensions. Why low-floor? Because a low H-point is essential for the dynamic and elegant proportions every five-door “coupe” or sports car needs to succeed. By reducing the height of the battery pack from its current 5.5 inches to 3.9, simple, slab-like packaging of the batteries becomes a viable alternative to more difficult layouts like that used by the Porsche Taycan, which has clever but complex cutouts for the foot wells and other spaces. A space-efficient basic matrix is also a bonus when it comes to adding more cells or adapting it to taller CUV or SUV body styles.
MX-1 versus MX-2
MX-1 has been conceptualized primarily for EV and PHEV applications, and offers three layouts. The first has no electrification, and the transversely mounted internal-combustion engine is a three- or four-cylinder unit that sits in its own cradle and drives the front wheels with a maximum power output of 300 horsepower. Second, the engine can be assisted by an electric motor integrated into a nine-speed dual-clutch transmission. Option number three has an all-electric front-drive module that may also be teamed with a rear electric motor to offer all-wheel drive, similar to the layout BMW uses in the 225xe and Mercedes is about to offer in the A-class. The vision for MX-2 isn’t yet as concrete. While Mercedes and Daimler will reportedly concentrate on a blend of electric motors and a four-cylinder engine in its larger models, BMW is reportedly reluctant to drop its straight six, so it’s possible that even if the venture is approved the old and new architectures could coexist a little longer than envisioned.
Predictably, the companies’ respective engineering squads have already compiled stacks of data, target figures, and tentative release dates. As far as batteries go—a switch to solid-state cells is expected to commence in 2025—scalability is crucial, with the peak energy density of 110 kWh set to increase to 150 kWh over time. MX-2 can handle in excess of 670 horsepower and peak torque of more than 735 lb-ft, and sophisticated electronics will control a variety of mix-and-match configurations, sources say. Other highlights include wireless fast charging, PHEV applications with a zero-emission range of up to 100 miles, and between one and four electric motors delivering advanced torque vectoring.
Perhaps even more interesting? According to those in the know, BMW and Daimler may look to eventually make all of this Lego-like hardware and software available to other carmakers. Will there ultimately be two platforms to rule them all?