Mercedes-Benz’s ambitious transformation in China’s electric vehicle market has hit its first major setback. Industry insiders reveal that the German automaker has postponed production of its all-electric, long-wheelbase CLA model to August, citing unresolved software development issues. Originally slated for an April start, the delay highlights the challenges legacy automakers face in adapting to a software-centric future.
Despite this, Mercedes-Benz affirmed to 36Kr that the new model, tailored specifically for Chinese customers, remains scheduled for its official production launch in 2025 while stressing the importance of thorough testing and ramp-up to meet local customer expectations.
The CLA is the debut model built on Mercedes-Benz’s new modular platform, MMA. Designed for compact and midsized vehicles, the MMA platform supports both electric and internal combustion technologies, offering manufacturers flexibility during the industry’s shift toward electrification. For EVs, it incorporates Mercedes-Benz’s 2.0 electric drive unit alongside an 800-volt electrical architecture for efficient energy management.
According to earlier reports by 36Kr, the MMA platform will also integrate the proprietary MB.OS operating system, which introduces enhanced visual interfaces and intelligent in-car voice assistance. The all-electric CLA, developed exclusively for China, is expected to feature at least Level 2 autonomous driving capabilities, including city navigation assistance.
Sources close to the project identify the vehicle’s electronic and electrical architecture as the source of the delay. This issue is not unique to Mercedes-Benz. Legacy automakers, including Volkswagen, have experienced similar delays with platforms like PPE, which underpin vehicles such as the Audi Q6L, A5L, and Porsche Macan EV.
Traditionally, manufacturers of internal combustion vehicles have struggled to develop expertise in electronic and electrical architectures. However, the automotive industry’s shift toward electrification and intelligent technology now demands centralized architectures, where a single control center coordinates functions across wheels, chassis, and other components. In contrast, legacy automakers have long relied on distributed architectures, with suppliers providing discrete controllers for specific functions, thereby minimizing the need for in-house software development.
Only a few automakers possess the capability to independently develop centralized control systems. Moreover, unifying interfaces and data across a sprawling supplier network requires extensive coordination, posing formidable challenges for traditional players like Mercedes-Benz, Audi, and Porsche, who now face these obstacles directly.
Dual-use platforms, such as Mercedes-Benz’s MMA and Volkswagen’s PPE, are designed to support both electric and internal combustion vehicles. This versatility necessitates managing the operations of high-voltage systems for electric motors alongside low-voltage systems for internal combustion engines, doubling the complexity for manufacturers already navigating steep learning curves in electronics.
To address these challenges, companies are forging partnerships and leveraging local expertise. Volkswagen, for instance, has engaged Xpeng Motors to oversee the EV architecture development for its China business. As part of this collaboration, hundreds of Volkswagen employees have been sent to Xpeng’s headquarters to gain hands-on software development experience, with some expected to remain onsite for up to three years.
Mercedes-Benz, meanwhile, has established a digital R&D center in Shanghai, employing engineers to focus on intelligent systems, autonomous driving, and cockpit applications.
These initiatives signal a shift in strategy, but timing remains a crucial factor. Although platforms like MMA and PPE feature advanced technologies, domestic Chinese automakers have already implemented comparable solutions, piling more pressure on brands aiming to close the gap.
The delay also positions Mercedes-Benz’s CLA in a highly competitive market. In 2024, the Aito M9 emerged as a bestseller in the RMB 500,000 (USD 70,000) price segment, while Maextro plans to introduce its S800 sedan later this year. At the same time, the more affordable Aito M8 is expected to become a key sales driver for the lineup. Adding to the pressure, Xiaomi Auto is gearing up to release its YU7 in mid-2025.
As China’s automotive market evolves at a rapid pace, automakers like Mercedes-Benz face increasing pressure to streamline development cycles and meet shifting market demands. The traditional 5–8 years once required for vehicle development now feels obsolete in an industry racing ahead. For carmakers, the new mandate is clear: accelerate or risk falling behind.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Xu Caiyu for 36Kr.