BMW and Mercedes Got New Plug-In Vehicle Pricing Right

BMW X5 xDrive40e
Source: BMW

With electric vehicle technology still expensive to deliver in new cars, automakers have a delicate dance ahead of them when they introduce plug-in versions of lineup staples. Price a vehicle too low and it will end up losing on every front; price it too high and there will be no volume, also leading to losses. With word of the prices of the BMW X5 and Mercedes S-Class hybrids now here, we have two examples of automakers getting it right for consumers in the market for German luxury vehicles.

We start with X5 xDrive40e, a plug-in crossover BMW says will go into production in August and hit U.S. showrooms in the fall. Preliminary estimates put the electric range around 13 miles and economy at 55 miles per gallon equivalent. Drivers will get a combined 308 horsepower, and 332 pounds-feet of torque in output from the electric motor and gas engine. It will take 6.5 seconds to hit 60 miles per hour from a stop.

BMW priced the X5 plug-in at $63,095, slotting it between the xDrive35d ($58,695) that has similar acceleration, and the xDrive50i ($71,695) that features a V8. Considering its green specs and lack of much compromise in power, there is nothing unusual about the plug-in price point. Mercedes has decided to take the same approach to the S-Class 550e, the PHEV version of its flagship sedan.

The standard S550 sedan and S550 plug-in hybrid share a starting price of $94,900, making them a legitimate option for consumers who want approximately 20 miles of electric range and up to 40 miles per gallon in economy. BMW and Mercedes’s new models could go a long way reversing the trend of automakers that have been approaching this issue the wrong way.

Source: Mercedes-Benz

One of the most glaring examples is poor pricing is the Honda Accord PHEV. The plug-in version of Honda’s midsize sedan retails for $39,780, or a cool $17,675 more than the standard gas model LX ($22,105). As the EV sales reports show anyone interested, the price gap is driving away nearly every last consumer. (According to, Honda sold 15 Accord plug-ins between March and May).

Even when stepping up into the luxury plug-in segment, which currently has few offerings for U.S. drivers, value in the hybrid variant as opposed to the gasoline models still factors into the equation. Consumers will not feel like they are being penalized for choosing the greener option of a known luxury car.

Otherwise, there is little that differentiates the S550 plug-in or X5 xDrive40e from their gasoline counterparts other than a slightly different grille. While we know the Volvo XC90 is plug-in sits at the top of the model’s price range and we wait on word about the Hyundai Sonata plug-in’s sticker price, we know Mercedes and BMW got it right with their first luxury PHEVs on the U.S. market.