Mercedes-Benz’s presentation on its future strategy this week offered a glimpse into what lies ahead for the brand, with teasers for several upcoming models. Over the next two years, Mercedes plans to introduce 36 new and updated vehicles, including a compact G-Class off-roader, a fully electric E-Class sedan, a new generation of the GLC, and refreshed versions of the S-Class, GLE, and GLS.

The lineup will feature a mix of electric and internal combustion engine models, reflecting the brand’s decision to redirect development funds from EVs to gas-powered vehicles.

A Baby ‘g-Class’ with Retro Vibes

One of the most interesting announcements was the confirmation of a smaller off-roader that will use a lowercase “g” in its name to distinguish it from the rest of the G-Class family.

More: Mercedes-Benz Vans Abandons EV-Only Push, Announces New ICE Platform

The teaser indicates that the new model will have a compact footprint while maintaining the boxy stance and ample ground clearance of its larger sibling. In fact, its design pays even greater homage to the original 1979 G-Class, thanks to its pronounced bumpers and short wheelbase.

Although Mercedes didn’t share details about its underpinnings, rumors suggest the baby g-Class could be fully electric. However, it remains uncertain whether it will use a ladder-frame chassis like the traditional G-Class or switch to a unibody design.

Fully Electric E-Class with a Classic Twist

Another major announcement was the upcoming fully electric E-Class sedan, which is expected to replace the EQE while being sold alongside the gas-powered E-Class. Mercedes revealed a teaser silhouette that hints at a shift from the rounded shapes of its current EVs to a more classic, angular design. The company promises a “status-oriented” wheelbase, improved noise insulation, and advanced driver assistance systems, including L2++ and L3 Highway capabilities.

More: Mercedes May Be Bringing Back AMG And Maybach S-Class Coupes

Mercedes is also preparing a facelifted version of the S-Class. The flagship sedan will receive styling and technology updates, along with expanded customization options through the Manufaktur label. The powertrain lineup will continue to feature diesel, gas, and hybrid variants. Notably, the V8 and V12 engines will still be offered, although the 12-cylinder model will be restricted to select markets.

Looking further ahead, the next generation of the S-Class, expected to arrive towards the end of the decade, will be available in both ICE and BEV versions.

Unified Styling for EVs and ICE

In line with industry trends, Mercedes announced that future ICE and BEV models will share a unified design language, similar to BMW’s approach. A teaser featuring two similarly sized sedans—presumably with different powertrains—showed the traditional Mercedes grille in the background, hinting that it could inspire the design of future models.

The unnamed models are covered under a veil, but appear to have a bulge on the edge of the hood, hinting at a new interpretation of the signature ornament or a more pronounced grille surround.

SUVs Galore

Looking at the crossover lineup, the most anticipated debut is the next-generation GLC, set to launch in 2026 as a competitor to the BMW iX3 Neue Klasse. This model will share the MB.EA platform with a fully electric C-Class sedan, both of which are expected to be more advanced than the upcoming CLA sedan’s MMA platform.

The new GLC will be joined by redesigned versions of the smaller GLA and GLB, as well as updated GLE and GLS models. All of these SUVs will showcase Mercedes’ latest design language, previewed in an official sketch that highlights a sculpted hood, aggressive headlights with star-shaped LED graphics, and a larger grille flanked by AMG-style bumper intakes.

Looking Ahead

Overall, Mercedes is planning a major overhaul of its lineup, with 17 new BEVs and 19 new ICE-powered models set to launch by 2027. These additions will span the entry-level, core, and top-end segments, helping the automaker expand its reach while streamlining production costs.

However, with tough competition and uneven global demand, Mercedes-Benz expects its carmaking margin to drop to around 6% this year, falling short of previous targets. To counter this, the company aims to cut production costs by 10% by 2027 and collaborate with suppliers to lower material expenses. This is all part of a broader strategy to boost profitability and navigate challenges like weaker demand for luxury cars in key markets such as China.

Mercedes says it will cut production costs over the next two years while at the same time, it will roll out almost 40 new or heavily revised models in an effort to reverse its fortunes. The automaker expects earnings to take a big hit in 2025 and thinks a renewed focus on traditional combustion power could help stop the slide.

It wasn’t long ago that Mercedes was vowing to go EV-only in major markets by 2030, but terrible sales figures for many of its electric cars has prompted a major rethink. The brand isn’t turning its back on EVs by any means – 17 of the new models it will launch by 2027 will be battery-powered. But 19 of the new cars will have combustion power and live on well into the 2030s.

Related: Customers Pull The Plug On Mercedes EV Sales, EQS Plummets 52%

This time, however, there will be very little design differentiation between ICE and EV models, even in the top-end models that ride on entirely different platforms and unlike smaller cars that will use a common architecture for both electric and combustion powertrains. The egg-shaped EQS has been a sales bomb for Mercedes and having learned from that mistake, future EVs will look like their gas brothers.

New products in showrooms this year include the CLA sedan, which will be available in EV and ICE forms with very similar prices and spawn a family of cars built on the same platform. The new CLA model family will feature many different body styles, including an SUV and wagon. All-electric GLC and C-Class cars are also on the way and Mercedes confirmed it is working on an E-Class EV to rival BMW’s i5.

On the combustion side, the company will soon unveil a facelifted S-Class and says engines with four to eight cylinders will be available across the Mercedes range, equipped to meet Euro 7 emissions standards. And it’s also hanging onto the mighty V12 engine for its flagship sedans.

Earnings at Benz’s car division dropped by 39 percent to €8.7 billion ($9.1 bn) during a tough 2024 and it expects 2025 to be even more brutal. It has pledged to cut costs by 10 percent by 2027 and reduce them even further by 2030.

Despite the announced cuts, Mercedes won’t shut down its German factories but it will move production of at least one model line from Germany to Hungary, where production is 70 percent less expensive. Mercedes also says it will increase its focus on building models for America and China within those countries to future-proof itself from looming tariff threats.