Mercedes-Benz has officially announced its exit from the electric vehicle (EV) joint venture with BYD, marking the conclusion of their 13-year partnership centered around the Denza brand. On September 14, 2024, the renowned German luxury car manufacturer sold its remaining 10 percent stake, which follows the significant reduction of its stake to ten percent back in 2021 when it had previously owned around 50 percent.
Through this arrangement, both companies aimed to manufacture premium electric vehicles. Under the Denza brand, they planned on collaborating to create innovative products targeting the growing EV market. BYD's acquisition empowers the Chinese automaker, known for its rapid expansion and breakthrough success within the global EV sector, to take full control of Denza.
Despite the potential for innovation and development under this partnership, Mercedes-Benz has indicated its technology was absent from all current models. Neither company has disclosed the financial details pertaining to this latest shift. Mercedes representatives did not provide comments beyond acknowledging the sale.
This transition arrives during a tense period for international trade relations, particularly between China and Europe. The European Commission is currently deliberated on the possibility of imposing tariffs on Chinese EV imports, which could reach up to 36.3 percent. Officials predict the decision from the EU member states will come soon.
Denza was initially founded as a 50-50 joint venture between Mercedes and BYD back in 2011, with the aim to combine their strengths to generate premium electric vehicles. Despite launching models like the Denza 300, Denza 400, and Denza 500, early sales numbers disappointed expectations, amounting to only 23,000 vehicles over the first decade. Notably, growth for Denza has accelerated significantly with recent models and technological advancements, selling over 200,000 EVs over the past three years.
Interestingly, this latest venture serves as another chapter for BYD, who has recently signed contracts with Turkey for establishing a substantial EV manufacturing plant, reportedly worth $1 billion. This new Turkish plant aims to facilitate access to the European market as base operations will be strategically located near Southeast Europe.
Reflecting back, the partnership began with high hopes, positioning both brands as rivals against other luxury and tech-embedded electric vehicles. Analysts speculate this division will allow Denza to continue refining its product range without the perceived limitations of its original partnership.
Both companies are now at unique crossroad moments. Mercedes-Benz, with its extensive heritage and recognition, faces challenges from diminished market share and the need to pivot more aggressively toward EV offerings worldwide, particularly as it navigates increased scrutiny from European regulators. Meanwhile, BYD continues its ascent, fueled by strategic moves and market demands, having already cemented its status as one of the leading EV manufacturers globally.
Aside from the loss of its key joint venture, Mercedes-Benz is releasing plans to realign its strategy and potentially open new markets. Observers will be watching closely how both organizations maneuver following this split and the larger contexts of automotive innovations worldwide.
Overall, the exit from Denza not only signifies the end of one chapter but also poses intriguing questions about the future directions of both Mercedes-Benz and BYD as they continue to operate separately yet participate within the same rapidly transforming automotive ecosystem.
