Mercedes-Benz is reportedly in advanced discussions with BMW, its German competitor, regarding a potential engine-sharing agreement. The proposal involves Mercedes utilizing BMW’s 2.0-liter B48 four-cylinder petrol engine in a range of upcoming Mercedes SUVs and passenger vehicles. This move comes as Mercedes reevaluates its internal combustion engine (ICE) strategies, possibly due to slower-than-anticipated adoption rates of new technologies. The partnership is viewed as a cost-effective strategy, allowing Mercedes access to a Euro 7-compliant powertrain and expanding plug-in hybrid (PHEV) options without significant internal investment. Mercedes recently introduced its new 1.5-liter M252 four-cylinder engine in the latest-generation CLA lineup, which is better suited for mild-hybrid applications but not designed for PHEV or range-extender use. The BMW B48 engine, designed for both transverse and longitudinal layouts, offers greater flexibility. If the deal is finalized, production of the engine would likely be handled at BMW’s Steyr plant in Austria. Discussions also include the possibility of establishing a shared facility in the US to mitigate rising tariffs. This would mark the first engine-sharing agreement between the two luxury rivals and could potentially lead to future collaborations on gearboxes.
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