After being front and centre of the Dieselgate scandal, Mercedes — under pressure from EU legislation and EV mandates — appeared to sketch out an electric strategy on the back of a napkin. Despite its vast engineering resources, the company seemingly cut corners and turned to questionable battery suppliers in China.

Put simply, Mercedes tried to build EVs on the cheap to keep pace with fast-moving Chinese rivals in their home market. The flaw in that plan is obvious: China has been executing a coordinated, long-term EV strategy for two to three decades.

Beijing’s sustained investment in powertrains, battery technology and software now allows Chinese manufacturers to deliver high-spec luxury EVs at prices that can undercut Mercedes by as much as 50 percent — often while matching or exceeding it on technology.

Mercedes’ sourcing decisions are now coming back to haunt it. Reports of battery-related issues have cast an uncomfortable spotlight on the brand’s EV transition and risk further denting confidence in a marque already bruised by past scandals.

Unsurprisingly, demand for Mercedes EVs in China is weakening as buyers look past badge prestige and focus more closely on the underlying product. YouTuber The Electric Viking has been tracking the unfolding situation.