Mercedes exec calls electric version of iconic SUV a 'complete flop'
A Mercedes-Benz executive has described the new electric version of one of its most iconic models as a 'complete flop' that dealers are struggling to shift.
It is reportedly being outsold seven to one by the petrol variant of the same SUV model, which for years has been a massive hit among celebrities and especially professional footballers.
The car in question is the G-Class - or 'G-Wagon' - which has been reinvented for an electric generation with the arrival of the £154,870 'G580' EV last year.
Only 1,450 examples have been delivered since its launch whereas the £133,500 gas-guzzling alternative continues to prove popular among well-heeled clients who snapped up 9,700 units over the same period to the end of April, German business newspaper Handelsblatt claims.
It reported that one exec said: 'The car is sitting like lead at dealers; it's a complete flop,' as they referenced its poor sales performance amidst a wider EV slowdown.
Mercedes-Benz earlier this year announced plans to bring more new petrol and diesel cars than electrics to market for its new product range in a bid to revive margins as it braced for a sharp drop in earnings in 2025 on the back of stalling EV sales.
The German paper claims another Mercedes 'manager' had attempted to defend the small sale volumes of G580 EVs, saying it is a 'niche model' with 'very low' production output.
This is Money contacted Mercedes-Benz, with a spokesman telling us: 'The G-Class continues to prove popular.
'The G-Class achieved its best-ever sales quarter in Q4 2024 and continued its strong sales performance in the first quarter of 2025 with sales up 18 per cent compared to last year.
'Mercedes-Benz is prepared for all market scenarios. Into the 2030s, we can flexibly offer vehicles with both a fully electric drivetrain or an electrified high-tech combustion engine.
'Our customers decide what suits them best. This applies also for the G-Class.'
The G580 was first unveiled last April. It is on sale in the UK for £154,870, which is a £20k mark-up on the petrol version
In keeping with its 45-years tradition, the new all-electric G-Wagon has a ladder-frame chassis.
It uses a huge 116kWh battery that provides energy for four e-motors located near the wheels to produce 579bhp.
However, because of its extra half-tonne of bulk over the petrol alternatives, it is 0.4 seconds slower to 62mph (4.7 seconds for the G580) than the burbling 4.0-litre twin-turbo V8 G63 AMG and its 112mpg top speed is down on the AMG's 149mph.
The additional heft of the battery pack also limits the electric G-Class' full-charge battery range, which is just 292 miles, according to the WLTP test cycle used in the UK and Europe.
This is almost 200 miles shy of its CLA electric saloon's market-leading single-charge range of 492 miles - and that's from a car costing from just £45,000.
In the US, one of the G-Class' biggest markets, the G580 EV's EPA-certified range is even lower, at just 239 miles.
Other factors are limiting the G580's appeal to customers include its steep premium over a six-cylinder internal combustion engine variant, a disappointing maximum payload of just 415kg and the lack of a practical towbar as an option.
Handelsblatt also reported this week that the disappointing demand for the electric G-Wagon has forced Mercedes to rethink plans for a smaller model Junior G-Class variant.
The forthcoming 'Little G' has been rumoured for 2027 and had been expected to launch exclusively with electric power.
However, Mercedes could now make it available as a hybrid as part of a wider strategy to push more combustion engine models into the market in the coming years.
In February, the Stuttgart luxury car maker said it will release 19 new combustion engine models and 17 battery-electric cars by the end of 2027, in a sign of a renewed focus on the former after its EV sales collapsed by a quarter last year.
Most of the new models will be in its top-end price tier, showing its commitment to its strategy of selling a lower volume of higher-margin vehicles, despite some investors and labour representatives expressing concern in recent months that the strategy had failed.
'The strategy of value over volume remains in place - it has not been abandoned,' CFO Harald Wilhelm said earlier this year, adding it was good news for its margin that combustion engine cars were still far outselling EVs.
Daimler-Benz first introduced the original G-Class in 1979, having developed the off-road in partnership with Steyr-Daimler-Puch in Austria.
Originally called the 'Wolf', it was designed as a robust military off-roader capable of taking on all terrains.
But in more recent times, the SUV has become the choice of footballers, celebs and social media stars wanting to show off their vast wealth and love of enormous - and hugely powerful - vehicles.
There have been a number of oddball modified examples too, not least the six-wheeled G63 6x6 and the Project Mondo G built in collaboration with premium coat company Moncler, which ultimately put a puffer jacket on a Mercedes G-Class.
Car makers scrambling to adjust EV strategies
Mercedes is among a raft of car makers grappling with a slower-than-expected uptake of EVs.
On Wednesday, Volvo Cars confirmed it had sold 59,822 cars in May, down 12 per cent year-on-year, primarily due to a lack of EV appetite.
The Swedish car maker, majority-owned by China's Geely, said in a statement that sales of fully electric cars fell 27 per cent to account for a fifth of its total sales volumes.
It also confirmed in May that it will cut 3,000 mostly white-collar jobs - around 15 per cent of its global workforce - as it contends with a slowdown in EV demand, higher operating costs and trade uncertainty triggered by US President Donald Trump.
Volvo UK declined to comment to This is Money when asked how many UK jobs could be impacted.
Legendary Italian marque Alfa Romeo has also hit headlines in recent days following reports from sources that it has delayed the launch of its new electric Stelvio SUV, which was due to go into production this year at its Cassino vehicle plant in central Italy.
Reuters said on Thursday that insiders had suggested it has been postponed to 2026 as it 'reassesses its strategy' amid tepid demand for electric cars, with the likelihood it will also be sold with hybrid power.
This would follow a similar strategy used by other Stellantis-owed brands, including Fiat, Citroen, and Jeep.
Fiat will make available a hybrid version of its latest 500 from next year, despite promises to only sell it as an EV. It also made a last-minute call to do the same with its bigger 600 last year.
The Citroen C4 X and Jeep Avenger - also both promised to be EV-only - now have hybrid powertrain options too.
This is Money contacted Alfa Romeo too.
A spokesperson on behalf of the bran told us: 'Stellantis has announced, through a company spokesperson, that it is working on an update to its plan for Italy.
'The plan includes an expansion and reshaping of activities in the country, in light of current market conditions, uncertainties surrounding EU regulations, and the impact of tariffs.
'A constructive dialogue is underway in the appropriate forums.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
21 minutes ago
- Reuters
Shaken by crises, Switzerland fetters UBS's global dream
BERN, June 6 (Reuters) - Switzerland announced reforms on Friday to make its biggest bank UBS (UBSG.S), opens new tab safer and avoid another crisis, hampering the global ambitions of a lender whose financial weight eclipses the country's economy. UBS emerged as Switzerland's sole global bank more than two years ago after the government hastily arranged its rescue of scandal-hit Credit Suisse to prevent a disorderly collapse. The demise of Credit Suisse, one of the world's biggest banks, rattled global markets and blindsided officials and regulators, whose struggle to steer the lender as it lurched from one scandal to the next underscored their weakness. On Friday, speaking from the same podium where she had announced the Credit Suisse rescue in 2023 as finance minister, Switzerland's president Karin Keller-Sutter delivered a firm message. The country would not be wrongfooted again. "I don't believe that the competitiveness will be impaired, but it is true that growth abroad will become more expensive," Keller-Sutter said of UBS. "We've had two crises. 2008 and 2023," she said. "If you see something that is broken, you have to fix it." During the global financial crisis of 2008, UBS was hit by a losses in subprime debt, as a disastrous expansion into riskier investment banking forced it to write down tens of billions of dollars and ultimately turn to the state for help. Memories of that crisis also linger, reinforcing the government's resolve after the collapse of Credit Suisse. For UBS, which has a financial balance sheet of around $1.7 trillion, far bigger than the Swiss economy, the implications of the reforms proposed on Friday are clear. Switzerland no longer wants to back its international growth. "Bottom line: who is carrying the risk for growth abroad?" said Keller-Sutter. "The bank, its owners or the state?" The rules the government proposed demand that UBS in Switzerland holds more capital to cover risks in its foreign operations. That move, one of the most important steps taken by the Swiss in a series of otherwise piecemeal measures, will make UBS's businesses abroad more expensive to run for one of the globe's largest banks for millionaires and billionaires. Following publication of the reform plans, UBS Chairman Colm Kelleher and CEO Sergio Ermotti said in an internal memo that if fully implemented, they would undermine the bank's "global competitive footprint" and hurt the Swiss economy. The reform would require UBS to hold as much as $26 billion in extra capital. Some believe the demands may alter the bank's course. "It could be that UBS has to change its strategy of growth in the United States and Asia," said Andreas Venditti, an analyst at Vontobel. "It's not just growing. It makes the existing business more expensive. It is an incentive to get smaller and this will most likely happen." Credit Suisse's demise exploded the myth of invincibility of one of the wealthiest countries in the world, home to a global reserve currency, and proved as unworkable a central reform of the financial crisis to prevent state bailouts. For many in Switzerland, the government's reforms are long overdue. "The bank is bigger than the entire Swiss economy. It makes sense that it should not grow even bigger," said Andreas Missbach of Alliance Sud, a group that campaigns for transparency. "It is good that the government did not give in to lobbying by UBS. The question is whether it is enough. We have a banking crisis roughly every 12 years. So I'm not really put at ease." UBS CEO Ermotti had lobbied against the reforms, arguing that a heavy capital burden would put the bank on the back foot with rivals. The world's second-largest wealth manager after Morgan Stanley is dwarfed by its U.S. peer. Morgan Stanley shares value the firm at twice its book value, compared with UBS's 20% premium to book. On Friday, the bank reiterated this message, saying that it strongly disagreed with the "extreme" increase in capital. But others are sceptical that the government has done enough. Hans Gersbach, a professor at ETH Zurich, said there was still no proper plan to cope should UBS run into trouble. "The credibility of the too big to fail regime remains in question."
Sky News
24 minutes ago
- Sky News
Roman Abramovich: From rags, to riches, to 'ripping off' Ukraine
👉 Listen to Sky News Daily on your podcast app 👈 The government is threatening to take former Chelsea FC owner Roman Abramovich to court over the proceeds of the sale of the Premier League club. Three years after being sanctioned for the oligarch's links to the Russian president, £2.5bn remains frozen in a bank account. The funds are earmarked for Ukrainian aid, but where will they end up? In today's episode, Niall Paterson talks to financier and author Bill Browder and Sky's sports correspondent Rob Harris about how Abramovich went from orphan to oligarch and where sanctions leave him today. Lawyers for Abramovich did not immediately respond to requests for comment.
The Guardian
42 minutes ago
- The Guardian
Between ‘rollover UK' and ‘retaliatory China': will EU hardball secure trade deal with US?
In Brussels' corridors of power, quiet optimism is growing that the EU's hardball strategy to secure a US trade deal is working. While Britain quickly moved to try to cushion the impact of Donald Trump's tariffs with a deal agreed last month – and US-Chinese relations are a tit-for-tat situation – the EU has taken a different stance. 'We are positioning ourselves between 'rollover UK' and 'retaliatory China',' said a Brussels source. The stakes are not just the £706bn in transatlantic trade between the EU and US but the fallout from what diplomats and businesses say is a dangerous assault on the global rules-based system that governs western democracy. 'The only thing that appeals to Trump is power. Amid all the nausea and uncertainty here, there is a significant chance the EU will go the whole way and not do a deal,' said a diplomat in the Belgian capital. 'If the EU doesn't stand up to Trump or demand the rigours of rules, the question will be: what is left of the international rules based system?' the source added, noting the risk to employment rights, free speech, social welfare and public care. The EU's steadfast strategy is high-risk, and has weeks to play out before the 90-day pause in Trump's threat to impose 20% tariffs on all EU imports ends in July. He has already slapped a 10% tariff on all exports, with more on autos and steel, which this week went to 50%. 'If in the end, if we are the only ones on the pitch, people will start to say we should have been more like the Chinese,' said one EU official, with demands for retaliation expected to arise 'very quickly from member states'. The biggest pothole in what threatens to be a bumpy road ahead may be a Nato summit on 24 June when Trump, who has shown visceral antipathy towards the EU, may find fault in what he considers freeloading allies. Right now, EU member states are united in their resolve not to capitulate in the face of his demands, which include the removal of non-tariff barriers such as food standards. 'What the US is doing has brought us together, and there's a sense of urgency of that cooperation within the 27 that is quite important,' says one diplomat. There is even a growing acceptance that US tariffs of more than 10% are a long-term reality. 'Ideally less than 10%, so it doesn't look like we have rolled over,' says one Brussels official. Before Trump took office for the second time the average tariff on US imports in the EU was about 2.5%. The EU's chief negotiator, Maroš Šefčovič, said on multiple occasions this week that he was 'optimistic' a deal would be done, but back at base, trade war preparations continue. 'We are keeping the gun on the shelf. We don't want to use it, but we want them to know it is there,' said one diplomat. Šefčovič said on Friday he had held another call with the US secretary of commerce, Howard Lutnick. 'Our time and effort fully invested, as delivering forward-looking solutions remains a top EU priority. Staying in permanent contact,' he wrote on X. Meanwhile, twin talks took place this week in Paris at the Organisation for Economic Co-operation and Development and in Washington with a team of EU officials led by Tomas Baert, trade adviser to the European Commission president, Ursula von der Leyen. Those talks helped 'clean the slate, clear the table', Šefčovič told a conference organised by the European Policy Centre, a thinktank, on Thursday in Brussels. He added that he had also discussed the continued threat of sectoral tariffs on pharmaceuticals and semiconductors with the US trade representative Jamieson Greer in Paris. Šefčovič said his message was that the US and the EU had mutual interests in re-industrialisation on both sides of the Atlantic, and in minimising China's unstoppable rise in key sectors such as electric vehicles and steel. 'Any obstacle in the middle of the Atlantic would simply make them less competitive and more vulnerable. This is the diplomatic, political but also very technical discussions we are having,' he said. Up to now negotiations have been somewhat hampered by the parallel universe occupied by the US president, and White House and EU officials. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Last month, Trump, out of the blue, threatened and then unthreatened to slap a 50% tariff on all EU imports, claiming Brussels was dragging its feet 'to put it mildly'. 'This came as a surprise to Maroš, because he had been in talks since February,' said one source. 'But because this is an imperial court, it is the emperor who will decide when talks are happening.' The volatility in the transatlantic relationship on European business is unprecedented. 'I have been here 10 years and I have never seen this level of nervousness, not during the pandemic, not after the invasion of Ukraine,' said a director at one trade group representing dozens of multinationals in Brussels, who declined to be named. Luisa Santos, the deputy director general at Confederation of Business Europe, which represents 42 national business federations, said trade would, like water, find its course but investment could prove the collateral damage. 'The whole basis of trade is WTO [World Trade Organization] rules,' she said. 'We agreed on the rules and they were accepted the consequences. Now the rule is the power game: 'I will impose what I think is best for me, and the bigger players with more power determine the rules and that is a huge change.' Santos added: 'I think the biggest shock in Europe is that we were supposed to be the traditional allies. But now we are basically put on the same basket as China.' Kyle Martin, the vice-president of European affairs at the General Aviation Manufacturers Association, whose members include Boeing and Airbus, said tariffs would end a 45-year-old US-EU agreement that aviation construction, which relies on a global supply chain, was duty-free. A Boeing 787 gets its front fuselage from Italy, its wings from Japan and doors from France, with assembly at home in Seattle, he pointed out. 'I don't see this having a positive [outcome] for either Boeing or Airbus or any other manufacturer. Everyone will be impacted because everyone's got an interconnected supply chain.' But while negotiations with the US continue, new EU agreements with India, Thailand, the Philippines, Indonesia, South Africa and Australia are also on the cards. Ultimately it is the profound shift in the world order that is bothering many in Brussels. The US was behaving 'like a very unevolved state', said one EU source, like a developing country that relied on customs duties for national revenue in the absence of income tax, corporate tax and VAT. 'Maybe this is what Trump wants, a smaller, leaner weaker state where everybody has to pay for themselves,' they said.
