Strategy and future of smart - What will the new smart look like?

2020 smart became the world's first conventional manufacturer to convert to an electric car brand. The brand had already discontinued the diesel at the end of 2014 and now also the gas engine. This means that smart is now on par with Tesla.

As we fans have already noticed, the change takes it's time, there is no immediate success. But the joint venture with Geely should change that soon.


It took Tesla many years before they had any success to show off. At smart things should go a little faster, but it is now important that the community sticks together and supports the brand:

The first thing to come is a new model, the media are talking about an SUV, but continue to promise it's going to be in the B segment. What's the new strategy? Why won't it be an actual SUV? That's what I want to go into in this article.


Topics in this article:

  • Who exactly is Geely?
  • What is a joint venture?
  • Why a joint venture with Geely?
  • What's done by Daimler and what by Geely?
  • SUV in the B segment. Is that not a contradiction in itself?
  • Why does it have to be electric, not even hybrid or hydrogen?
  • What will the next smart look like, what will it be capable of?
  • What about the fortwo?



Who exactly is Geely?


Geely was founded 1986 in China and manufactured refrigerators at the time. 1992 they also started manufacturing motorcycles and in 1998 they started building cars. In the same year that the first smart fortwo was delivered to private customers. Geely had the vehicle technology from the Japanese manufacturer Daihatsu, smart from Mercedes.


While smart concentrated on building small cars, Geely concentrated on having a wider portfolio and grew into a large manufacturer. In 2009/10 they were able to buy Volvo from Ford and in 2017 Geely took over 51% of the Lotus's company shares and also became the largest shareholder of Volvo Trucks. Furthermore, Geely has been Daimler's largest single shareholder since 2018.


Strategie und Zukunft von smart - Wie wird der neue smart aussehen?


Geely's first and still only micro car is this "tobe M'car", also known as the Geely Panda. It was built from 2006 to 2017 and even available with an electric motor. At 3.6 meters long, however, it was still quite large.



What is a joint venture?


First things first: Daimler did not sell smart to Geely. Smart is still part of Daimler.


Strategie und Zukunft von smart - Wie wird der neue smart aussehen?


The term joint venture only defines that two or more partners work together. With which aim and with which participation is not defined by the term.


Daimler and Geely each hold 50% of the joint brand. This means that nobody can decide anything on their own as nobody has a majority.


What I would like to note here:

Daimler has not given up on smart. If Daimler wanted to get rid of smart, they would have sold it. Just like Ford did with Volvo.

Also the brand's environmental balance is no longer a argument. Daimler's electric car offensive will start in 2021: EQS, EQE, EQA and EQB are all already being tested and what I have personally seen on the streets and at the charging stations is surprisingly promising. Both, in terms of battery capacity, as well as charging power and curve. Better than the EQC and EQV. Mercedes can probably achieve the necessary electric sales figures by the end of 2021, without smart.

As before, there are more than enough people at Daimler who are passionate about the smart brand, also in the upper managment.



What's done by Daimler and what by Geely?


smart vision EQ fortwo


According to current publications, it will be as follows:

Geely is responsible for all the technology, which means that Geely will provide the entire drive train (Battery, motor, charger, ..). In addition, the complete infotainment system and the vehicle platform on which everything is based on. (SEA)

Daimler is of responsibility everything that the customer sees and touches. This ensures that smart does not lose it's quality and that the design will remain true to the brand.


The idea behind all of this is that the smart gets the best of both worlds: quality and technology



Why a joint venture with Geely?


Unfortunately, smart has not achieved what Fiat achieved with the 500 and Mini with their complete range of models: To keep customers enthralled with a cool design. Therefor their customers are also willing to spend "a little more". Presumably, smart simply lacks the history for that.

The smart is (unfortunately) sold almost exclusively based on the price, so this has to be as low as possible. This is only possible by producing as high quantities so that the development costs can be allocated to many vehicles. Just because it's a smart vehicle doesn't mean the customer wants to pay "a little more" or better said: Not enough want to.

For this reason, smart began to restructure itself internally in 2005/06, to save costs and to focus on their core business: The smart fortwo. In 2008 they also started shipping to America, this way they'll reach more potential customers. But since everything is a bit bigger in America, not just the cars, but also the roads, the smart didn't have much success there from the start. The best years were 2008 and 2009, although 2009 was already declining.


The cooperation with Geely should have two advantages:

  • Opening up a new and growing market: In China you get very high import duties if you don't work together with a Chinese manufacturer and produce there.
  • Lower development and production costs: In order to keep the vehicle price down, it is essential to lower the production and development costs. Daimler does not have a modern vehicle platform for the A and B segments, Geely, with the SEA platform, does.


These are measures to keep the brand alive. If Lotus and Volvo show one thing, it is that Geely does not want to destroy the origin of the brands, they want to preserve it.



SUV in the B segment. Is that not a contradiction in itself?


SUV stands for "Sports Utility Vehicles". In the past, these were off-road vehicles such as the G-Class and the Range Rover. In the meantime, SUVs became large vehicles in which you sit high. But mostly, due to the lack of all-wheel drive, it is better not to drive them off-road. This is why the term SUV is now associated with large cars. Today the term is just a name with which you can sell almost any car.

The so-called B-segment describes the vehicle segment in which the smart EQ forfour, but also vehicles like the VW eUP !, the Honda E and the Twingo electric, are at located. The vehicle segment is also generally known as "small cars". Not to be confused with the A-segment, the "micro cars" to which the smart EQ fortwo belongs.


A smart SUV in the B segment will only get the term "SUV" because it sells better this way. It will still be relatively small. We've seen this before, for example with the Edition Nightsky of the smart EQ forfour. The add-on parts were meant to add "SUV" optics.

Suzuki does something similar with theirs Ignis, built since 2016. They refer to it as a "micro-SUV" and thus reach new customers: people who want to drive an "SUV" but do not want to (or simply cannot) park an actual SUV.


The 2016 Suzuki Ignis is just 3.7 meters long, still 0.2 meters longer than that smart forfour, it shows how SUV in the B segment could be meant.

Could the Renault City K-ZE be a vanguard ..? The Chinese small SUV from Renault will also be available in Europe starting 2021. However, with very sobering key data:

  • 27.4 kWh (< 200 km / 120 mi)
  • 30 kW CCS
  • 45 PS
  • no App
  • 5 doors
  • 4 seats
  • 3.7 meters long
  • no additional trunk in front
  • approx. € 15,000 base price


In Europe it is marketed as Dacia Spring and also built in China.



Why does it have to be electric, not even hybrid or hydrogen?


This is also a question of cost, although that sounds strange at first: The 2020 smartEQfortwo costs about twice as much as its combustion version.


But it will not stay that way, two things are going to happen:

  1. Rising prices of a combustion engines
  2. Falling prices of an electric vehicles

In order to be able to comply with current and future emission standards, internal combustion engines have to keep getting cleaner. This requires high development costs, which have to be allocated to the number of vehicles. A further complicating factor is that internal combustion engines for small cars are at least as complex as internal combustion engines for large and expensive cars. An engine in the S-Class can cost significantly more than in a smart, but the engine from the S-Class cannot be taken over and scaled down to the smart.

On the other hand, there is the much simpler technology from electric cars. The motor and reduction gear box are much simpler and the battery can be scaled wonderfully. The 1st generation EQC and EQV are a good example of this. Same drive train, same battery, only difference: The battery in the EQV has two more battery modules than the EQC. (Electric car basics: Battery pack & BMS)


By the way, the smart ED4 is already significantly cheaper than that smart ED3. Even if the base price does not directly suggest that. What is often overlooked is, that the battery is already included with the smart ED4's price. There is no additional battery rental any more.


If you were to offer the smart as a hybrid, that would drastically increase vehicle costs, as you would then have two powertrains. That's additional costs, both in development and in production. While the electric smart has the same dimensions, storage space and weight as a gasoline engine, a hybrid would have a significantly higher weight and the development team would have to decide what to prioritize: 120 km electric range and a halfway decent internal combustion engine cannot be implemented in a small car such as a smart.

Incidentally, this also applies to hydrogen, which is ultimately only a hybrid. The most expensive hybrid ever, both to maintain and to manufacture. And its range would still be less than 200 km / 120 mi, due to the small form factor of a smart car.



What will the next smart look like, what will it be able to do?


The only thing, which is certain at the moment, is that it will be a vehicle in the B segment, it will be purely electric and that smart employees also refer to it as an "SUV". It is going to be based on Geely's SEA platform. The platform scalable and should be able to do everything from a fortwo, a forfour and even large sedans. For this purpose segments in the platform are simply removed or added in the middle section. The battery capacity goes up and down accordingly. As with the 1st generation EQC and EQV.


It is not yet known what the dimensions of the platform will be, scaled to the A and B segments. It was presented with the Zero Concept study. A limousine that can do 700 km / 420 mi and reach 0-100 km in under 2 seconds. In addition, it should be able to do everything that a good announcement Bingo has to offer.


So for now we have no choice but to make assumptions and wishes:

  • 30 kWh or more (> 200 km / 120 mi)
  • 50 kW CCS (!) or more
  • 3.7 kW or 11 kW type 2
  • Standard: > 90 PS (RWD)
  • Brabus: > 125 PS (AWD?)
  • Connectivity, both in the vehicle and to the vehicle.
  • 5 doors
  • 4 seats
  • maximum 3.5 meters long
  • additional trunk in front
  • < 15,000 € base price


The next smart is currently announced for 2022. The fortwo and forfour will be built at least till then, they will most likely not receive any noteworthy hardware updates anymore.


Strategie und Zukunft von smart - Wie wird der neue smart aussehen?


Strategie und Zukunft von smart - Wie wird der neue smart aussehen?



What about the fortwo?


The fortwo is not dead. It should remain part of the smart brand, although further development is currently not in discussion. At least that is what Auto-Motor-und-Sport, a well know German publishing company, knows from internal circles.


In fact, it would also be a bad decision to leave the micro car market completely. The smart EQ fortwo is still the only actual car in this vehicle class. Here, too, we can currently only make assumptions and wishes:

  • 25 kWh or more (200 km / 120 mi)
  • 50 kW CCS or more
  • 3.7 kW or 11 kW type 2
  • Standard: > 90 PS (RWD)
  • Brabus: > 125 PS (AWD?)
  • Connectivity, both in the vehicle and to the vehicle.
  • 3 doors
  • 2 Seats
  • maximum 2.5 meters long
  • Convertible and Coupe
  • additional trunk in front
  • <12,000 € base price (coupe)



What will happen to the tridion cell is still unknown. I don't dare to make any predictions. However, Geely promises, that the SEA platform will meet all safety standards with full 5 stars. That would be as good as the tridion cell.


Strategie und Zukunft von smart - Wie wird der neue smart aussehen?



Conclusion


I drive the smart ED now for over 200,000 km and the smart EQ for over 100,000 km, the future of smart definitely lies in emobility. I am convinced of that.


Nobody knows whether the joint venture between Daimler and Geely is the right thing to do, but it's currently the best option. Tesla also had a very difficult time in the beginning and there were articles almost weekly that they were finally bankrupt. However, at the end of 2020 they reached the point where they delivered a car every 15 minutes.


The long-awaited upheaval began in 2020 and it will now take place. True fans of the brand remain loyal to it right now, better times are on the horizon. Both for the brand and for its fans. This can also be seen in the steadily growing EQpassion Community.