Recent reports, initially from a German publication called Manager Magazin and since cited and corroborated by others, suggest that Mercedes-Benz is talking with BMW to source four-cylinder engines for its future vehicles, with a potential start date of 2027.
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Why is this happening? Due to a slower-than-expected transition to EVs, Mercedes reportedly needs more combustion engines for plug-in hybrid models than it had initially planned. The company had previously partnered with Geely in China to develop small gasoline engines. Still, rising trade tariffs and political hurdles are making it a risky venture for key markets like the U.S. By partnering with BMW, Mercedes would secure a regional supply of engines.
Which engines? Rumour has it that BMW's turbocharged 2.0-litre inline-four, known as the B48, is the unit the Three-Pointed Star is interested in. The engine is used across a wide range of BMW and Mini models and is well-suited for both longitudinal and transverse layouts, making it a good fit for many Mercedes-Benz vehicles, from compact cars to the C-Class and GLC.
What are the benefits?
Cutting development and production costs for internal combustion engines would be a strategic move for Mercedes. This would allow it to focus resources on electrification while still having a reliable and efficient engine supply for its hybrid and mainstream models.
For BMW, this would secure additional production volume and revenue for its engine plant in Steyr, Austria. It's a win for BMW to have its fiercest competitor as a customer, solidifying its reputation as a premier engine supplier (BMW also supplies engines to other brands like Morgan, Ineos, and Toyota ).
Historical context: While this would be the first time the two rivals have shared engine technology, they have collaborated before on other ventures, such as the HERE mapping service and various mobility services.
It's important to note that this is still a developing story based on reports and is not yet officially confirmed by either company.
