A BMW Heart Beats Under the Mercedes Hood?

Two of Germany’s fiercest rivals may soon find themselves in an unlikely embrace. Reports suggest that Mercedes-Benz is preparing to source engines directly from BMW, a move that could see Stuttgart’s next generation of cars powered by Munich’s four-cylinder technology as early as 2027.

In a twist few would have predicted, Mercedes is in advanced talks with BMW to integrate the latter’s 2.0-liter turbocharged B48 petrol engine into a range of upcoming models. This unit, a cornerstone of BMW and Mini line-ups for a decade and now even found in the latest BMW M2, could become the beating heart of cars wearing the three-pointed star. For Mercedes, the logic is straightforward: abandon costly in-house development of smaller combustion engines and concentrate resources on high-margin six- and eight-cylinder units as well as its faltering but still vital electrification program.

The cooperation is unlikely to stop at engines alone. According to Manager Magazin, the two automakers are exploring the joint use of gearboxes and even complete hybrid powertrains. Should the deal be finalized later this year, the alliance would amount to more than just technical collaboration; it would represent a strategic pact between long-time adversaries struggling with the same industry headwinds.

BMW, for its part, stands to gain handsomely. Its Steyr plant in Austria, already Europe’s largest engine factory, would see production volumes rise, bolstering revenues precisely when the entire sector is hunting for survival strategies. Meanwhile, Mercedes would benefit from immediate cost savings at a time when its finances look fragile. The company’s second-quarter profit for 2025 plunged by 69 percent to just €957 million, underlining how quickly its previous strategy has unraveled.

Behind this unexpected courtship lies a harsh reality: demand for fully electric vehicles has not materialized as swiftly as projected, leaving premium brands caught between regulatory pressure and customer hesitation. In this climate, pragmatism trumps pride.

So when the next wave of Mercedes models—ranging from compact GLA and GLB crossovers to the C- and E-Class—takes to the roads later this decade, there is every chance their refined hum will carry a Bavarian accent. In an industry where survival often demands strange bedfellows, even the most entrenched rivalries can yield to necessity.