| Thanks for reading Hyperdrive, Bloomberg’s newsletter on the future of the auto world. Read today’s featured story in full online here. Mercedes-Benz unwrapped its most affordable electric sedan yet as the German manufacturer seeks to challenge EV makers such as Tesla, which has suffered from tumbling sales in Europe. Expected to start around €50,000 ($54,283), the new CLA will go up against models produced by Elon Musk’s carmaker and China’s BYD. Mercedes will begin making the vehicle in the coming weeks, with sales starting in early summer.  The new Mercedes-Benz CLA Photographer: Mercedes-Benz AG – Communicati/MediaPortal Mercedes-Benz AG The new car will be a test for whether Mercedes can make EVs that sell after the company’s initial focus on top-end models like the €110,000 EQS limousine flopped. The CLA is Mercedes’ only new EV this year, putting extra scrutiny on its technology at a time when the automaker’s profitability comes under growing pressure. While the sedan carries a roughly €10,000 premium over Tesla’s similarly-sized Model 3, it may benefit from shifting attitudes toward Musk over his polarizing politics. Tesla’s deliveries plunged 76% last month in Europe’s biggest car market Germany, where Musk has endorsed the far-right AfD party. Sales of the Model 3 are down across the region, and slumped last year in California, which voted overwhelmingly Democratic. Executives are also betting on the sedan to counter the narrative that Mercedes is falling hopelessly behind in China. The company’s sales are declining in the world’s largest auto market as local brands like BYD and Geely Auto are taking over with highly affordable EVs.  Photographer: Mercedes-Benz AG – Communicati/MediaPortal Mercedes-Benz AG To strengthen the CLA’s appeal, Mercedes is equipping the sedan with its latest software, and perks including a glass roof that filters UV rays while brightening the cabin. The EV will have a range of as many as 792 kilometers (492 miles) before needing to recharge. Mercedes will also make a hybrid version to satisfy still robust demand for combustion-engine cars as the EV shift slows in some markets. “There is no Chinese car with the same range in this segment,” said Mercedes’ technology chief Markus Schäfer. Read More: Mercedes-Benz Car Sales Drop as China, EV Slump Take Toll Under Källenius, Mercedes has focused on high-end luxury vehicles while scaling back compact cars. But with EV demand faltering, the company has delayed its goal of producing only electric cars and reaffirmed investment in combustion-engine vehicles. It has also warned of lower profit margins due to trade tensions and shifting consumer sentiment. — By William Wilkes  The Autostadt Delivery Tower at Volkswagen headquarters in Wolfsburg, Germany. Photographer: Krisztian Bocsi/Bloomberg Volkswagen’s namesake brand pushed back its profitability target by three years as the carmaker contends with muted sales and the costs of slimming down its bloated operations. VW is now aiming for a 6.5% operating margin in 2029, rather than next year, as it cuts capacity and workers to offset lower demand in Europe and China. The brand’s return on sales dropped to 2.9% last year, the lowest since 2020. Read More: | 
