Overview

• Reports from Manager Magazin and Autocar say negotiations are at a high level, corroborated by a Mercedes source, while BMW has not publicly commented.
• The engine under discussion is a 2.0-liter turbocharged derivative of BMW’s B48, compatible with longitudinal and transverse layouts and suitable for plug-in hybrids or range-extender use.
• The unit is reportedly earmarked for models ranging from the CLA, GLA and GLB to the C-Class, E-Class, GLC and the planned “Little G” off-roader.
• Mercedes’ new 1.5-liter M252, produced in China by Horse, is suited to mild-hybrid duty but not engineered for PHEV or range-extender roles, prompting the search for a broader Euro 7–compliant solution.
• An announcement is widely expected before the end of 2025, with initial Mercedes models using BMW engines targeted around 2027 and production likely at BMW’s Steyr, Austria plant, with a joint U.S. facility under consideration to address tariffs.