Mercedes-Benz is reportedly in discussions with BMW over sourcing four-cylinder engines to offset weakening electric vehicle sales, according to Germany’s Manager Magazin.
The proposed deal could see Mercedes use BMW’s B48 engine, currently powering most BMW and Mini models, across a range of Mercedes vehicles including the CLA, GLC, GLB, C-Class and E-Class. The discussions are said to be in advanced stages, with an announcement potentially expected by the end of the year, Autocar reported.
Mercedes’ U.S. electric vehicle sales have fallen 55% in the first half of 2025, while European registrations dropped 2% through June compared with 2024. The company recently introduced a 1.5-litre turbo engine produced in China, but it is not considered suitable for plug-in hybrid or extended-range models.
Manager Magazin also reported that the two automakers may explore a shared engine plant in the United States to help mitigate the effects of higher import tariffs. Mercedes is expected to increasingly rely on plug-in hybrids and extended-range vehicles to address slower-than-anticipated demand for electric models.