Although the global BEV market expansion is slowing, many major OEMs are adhering to their long-term BEV policy.
As a result, OEMs that want to focus their resources on next-generation core technologies such as batteries, eAxle, and software for the future are struggling to improve the efficiency of their engine divisions.

According to a German newspaper report in September 2025, Mercedes-Benz and BMW are negotiating behind the scenes for cooperation in small engine production.
Negotiations began at the end of 2024 and are ongoing with the agreement of the CEOs of both companies.

For both companies, engine technology is the foundation of their competitiveness, and it is not easy to entrust their core technology to a sworn enemy.
However, in the case of small 4-cylinder engines, the technological barriers are considered to be relatively low.
In fact, Mercedes-Benz has already outsourced the production of straight-4 gasoline engines to Geely Automobile.

However, the company is not satisfied with the performance of these engines, and it is believed that it is considering collaboration with BMW in light of the risk of eliminating Chinese-made parts from the U.S. market due to the intensifying conflict between the U.S. and China.
Depending on the outcome of the negotiations, there is a possibility that BMW-made engines will be installed in Mercedes-Benz vehicles as early as 2027.

It is almost certain that hybrid vehicles will become the mainstream in the foreseeable future due to the revision of environmental regulations in the U.S. and the EU, and that engines will survive longer than initially expected.
This section summarizes the OEMs’ engine strategies.