Who would’ve thought we’d see the day when Mercedes-Benz, the symbol of German luxury, might rely on BMW to keep its cars moving? Yet here we are. Reports suggest that starting in 2027, Mercedes could be fitting its new models with BMW’s four-cylinder engines — a move that would have sounded unthinkable just a few years ago.
Why Mercedes Needs the Help
Mercedes hasn’t had the smoothest ride lately. In the second quarter of 2025, its profit margin sank to just 3.2%, and global sales in the first half of the year slid to 900,000 cars — the lowest since 2020. On top of that, the idea of relying on Chinese suppliers for combustion engines has turned into a political headache in key markets like the United States.
That’s where BMW comes in — yes, the arch-rival. Sometimes even competitors make the most convenient partners.
What’s on the Table
According to Autocar, talks between the two companies are already well advanced. The centerpiece is BMW’s 2.0-liter turbocharged B48 engine, a power unit built in Austria and known for its versatility. It can be fitted in different layouts, which gives Mercedes plenty of options for everything from compact cars to mid-size SUVs.
There’s even discussion about building these engines together in the U.S., which would sidestep any potential tariffs if they were shipped from Europe.
A Win-Win Situation
For Mercedes, the deal is like hitting two birds with one stone: it gets quick access to Euro 7-compliant engines without burning billions on new ICE development, and it keeps its hybrid and combustion lineups alive well beyond 2027.
For BMW, it’s an easy revenue boost. Supplying engines to Mercedes not only keeps its Austrian plant humming but also reinforces its reputation as a maker of some of the world’s most reliable engines. And let’s not forget — BMW has already played this role before, powering brands like Land Rover and Toyota.
A Shift in Strategy
This engine deal also signals something bigger: Mercedes quietly easing off the full-EV promise. Just a couple of years ago, the company was talking about going 100% electric by 2030. Now, it’s looking at 50% by the end of the decade. That’s why Mercedes is still pouring €14 billion into developing new combustion and hybrid tech — it’s a safety net for the years ahead.
What Drivers Can Expect
If everything goes through, we might soon see BMW engines inside cars like the Mercedes C-Class, E-Class, GLC, GLB, GLA, CLA, and even the rumored “baby G-Class.” That means quicker rollout of advanced hybrid options and, hopefully, no compromise on the premium driving feel Mercedes fans expect.
But perhaps the most fascinating part is the bigger picture: this collaboration could redefine the legendary Mercedes vs. BMW rivalry. Instead of being just about who builds the better car, it could become a story of two giants knowing when to fight — and when to team up.
