Overview

• Talks are described as advanced by Manager Magazin, with a decision timeframe of roughly six to eight weeks based on insider accounts.
• If approved, the first phase would see BMW supplying four-cylinder engines to Mercedes from 2027, with production slated for BMW’s Steyr plant in Austria.
• Development chiefs Markus Schäfer at Mercedes and Joachim Post at BMW reportedly agree the swap-in is technically feasible with only minor adjustments.
• Further steps under consideration include sharing gearboxes or full drivetrains and exploring U.S. engine production to manage tariffs, potentially via separate lines or a joint venture.
• Mercedes is seeking modern combustion solutions for PHEV models without heavy reliance on China-sourced Geely units, while BMW would secure Steyr utilization and potentially earn high three-digit-million euros in revenue.