Mercedes-Benz is exploring a landmark collaboration with BMW that could see the German rival supplying four-cylinder petrol engines for a wide range of Mercedes vehicles. The move comes as Mercedes recalibrates its internal combustion engine (ICE) strategy amid slower-than-expected electric vehicle adoption.
High-Level Negotiations Underway
Sources tell Autocar that Mercedes and BMW are engaged in advanced planning and negotiations, with a formal announcement on the partnership expected before year-end. The discussions, first reported by Manager Magazin, suggest a historic cooperation between two of Germany’s top luxury carmakers.
Under the proposed deal, BMW would supply a new generation of turbocharged four-cylinder engines for Mercedes models from the CLA, GLA, and GLB to the C-Class, E-Class, GLC, and the upcoming “Little G.” The collaboration is framed as a strategic step to cut development costs while ensuring compliance with Euro 7 emissions standards.
Bridging the ICE and Hybrid Gap
Mercedes is currently rolling out its in-house M252 1.5-litre four-cylinder engine, produced in China through the Horse joint venture between Geely and Renault. The M252 powers the new CLA in three outputs, 136bhp, 163bhp, and 190bhp and pairs with an eight-speed dual-clutch gearbox and a 27bhp electric motor. While effective for mild-hybrid setups, the engine is not optimized for plug-in hybrid (PHEV) or range-extender use—an area where BMW’s B48 engine could fill the gap.
The B48, a turbocharged 2.0-litre engine widely used across BMW and Mini models, offers flexibility with both longitudinal and transverse layouts. This would give Mercedes greater versatility across its compact and mid-sized lineups. Production is expected at BMW’s Steyr facility in Austria, with potential for a shared U.S. plant to avoid rising import tariffs.
A Historic First for German Luxury Automakers
If finalized, the collaboration would mark the first time two German luxury brands share engines—and possibly gearboxes—on a large scale. For Mercedes, it represents a pragmatic approach to balancing regulatory compliance, hybrid expansion, and development costs. For BMW, it offers an opportunity to leverage engine production across a broader market.
Industry insiders see the potential partnership as emblematic of the changing landscape in automotive engineering: even long-standing rivals are increasingly exploring cooperation to navigate shifting consumer demands, environmental regulations, and cost pressures.
This proposed tie-up underscores the growing complexity of luxury car manufacturing, where electrification, efficiency, and collaboration are now driving strategic decisions.
