The unique aspect of this collaboration is that it incorporates the F1 team's racing mindset and technological expertise directly into product development. By partnering with its F1 team, Mercedes aims to regain its competitive edge. Last year, Mercedes launched the EQXX concept car, which achieved a range of more than 1,200 km in just 18 months of development, leveraging the F1 team's expertise in engine and electric motor efficiency, aerodynamics, and rolling resistance. Mercedes' Chief Technology Officer Markus Schaefer believes that their partnership with the F1 team provides them with an edge that other companies, including Tesla, do not have.

Legacy carmakers like Mercedes are facing pressure to develop electric vehicles (EVs) faster as newer entrants, particularly Tesla, can quickly develop or modify their models. Chinese EV manufacturers have also cut development times and are launching cheaper and innovative EV models in Europe. To reduce costs and increase efficiency, carmakers are focusing on making their EVs more efficient, lighter, and have longer ranges. The push for efficiency is also driven by the scarcity of battery materials. Mercedes has taken an unprecedented step of collaborating with its Formula One (F1) team to build more efficient and faster EVs. Mercedes plans to apply the F1 approach to develop at least half a dozen new projects, such as batteries, invertors, and new generations of motors, for mass-market Mercedes models.

Movement of Daimler stocks in the last five years. (Source: Trading Economics)