Mercedes-Benz and BMW are exploring an unusual collaboration: the three-pointed star brand would fit the Bavarian rival's four-cylinder engine into part of its combustion engine range, a move designed to boost its plug-in hybrids and extended-range systems in a context where full electrification is progressing more slowly than expected.
According to several publications, including Autocar , the talks are at an advanced stage and could lead to a formal announcement before the end of 2025, which would make this agreement a milestone: it would be the first time that two direct rivals in the German premium segment share a gasoline engine.
An unprecedented alliance in German industry
The potential cooperation is part of a clearly economic movement: sharing critical technology to maintain competitiveness while optimizing investments. In a market that hasn't adopted electric cars as quickly as expected, the right mix of clean combustion and partial electrification is once again gaining prominence. At least as a transition.
For Mercedes, the appeal of the agreement is clear: to meet Euro 7 without duplicating R&D efforts on four-cylinder engines, reduce costs, and ensure a versatile powertrain that allows them to expand their PHEV offering and range extender configurations.
The engine involved: 48-liter B2.0
According to rumors, the candidate under consideration is the BMW B48 , a 2.0-liter turbocharged four-cylinder engine widely used in BMW and MINI vehicles. It is assembled at the Steyr plant in Austria and is notable for its versatility: it accommodates both longitudinal and transverse engine configurations and is designed for integration into plug-in hybrid and extended-range hybrid systems.
Meanwhile, Mercedes already has the 1.5-liter M252 engine for mild-hybrid applications, manufactured through the joint venture Horse (Geely-Renault). However, this engine block is not designed as a basis for PHEVs or REVs, hence Mercedes' interest in the B48 as a key component of its electrified configurations.
What models could adopt it?
If the deal were to be finalized, the BMW-sourced engine would be reserved primarily for PHEV and extended-range versions in compact, mid-size and SUV segments, covering everything from entry-level to the mid-range.
- CLA (new generation and electrified variants)
- GLA and GLB in their plug-in hybrid versions
- C-Class and E-Class with PHEV configurations
- GLC with hybrid powertrains
- “Little G” (future all-terrain access vehicle) with electrified solution
Calendar and production
Sources indicate an announcement before the end of 2025 and the start of B48 use in Mercedes models from 2027 , with Austria as the nerve center of supply.
For Mercedes, the exchange would mean significant savings in development and the opportunity to concentrate resources on software, batteries, and electric platforms. For BMW, it would increase the scale of the B48 engine , improve capacity utilization at Steyr, and open the door to sharing costs for future powertrain upgrades.
Furthermore, the possibility of extending the agreement to other key powertrain components, such as transmissions, is on the horizon if the technical and economic fit proves favorable for both parties.