Electric sub-brands are one of the automotive industry’s boldest branding experiments of the last decade. For some manufacturers, they’ve created instant desirability and cult-like followings. For others, they’ve become costly detours that quietly fade as companies revert to familiar badges. To understand why Hyundai’s Ioniq line feels like a decisive win while Mercedes’ EQ range is already being phased out, we need to look beyond the cars themselves and into brand equity, customer psychology, and the realities of transitioning from combustion to electric power.
Mercedes and Volkswagen provide two clear case studies in the complication of EV-specific branding. Both set out to build fresh electric identities untethered to their combustion line-ups. But reality has forced them to rethink. The next-generation of Mercedes-Benz E-Class hints at a strategic shift that mirrors what happened with the GLC: the distinctively styled EQ models are making way for EVs that look and feel like the familiar core models that customers know. That means the next electric E-Class won’t be some slippery, soap bar-shaped spaceship but a traditional three-box saloon — just one that happens to be electric.
That direction feels almost inevitable. Ola Källenius himself noted that the new electric GLC could easily be mistaken for the next combustion GLC, and he meant it as a positive. Internal descriptions of the EQE replacement emphasize classic E-Class proportions, status-oriented wheelbase length, and comfort-first design. In short, it will be a big Mercedes that carries decades of reputation forward rather than attempting to build a new identity from scratch.
This is where Mercedes' EQ experiment faltered. The EQ range attempted to stand apart, visually and conceptually. But the brand equity — refinement, gravitas, and timelessness — lived in the E-Class, S-Class, and GLC nameplates. Creating a parallel universe with different names and unfamiliar styling meant Mercedes voluntarily cut itself off from the trust it had cultivated since the 1950s. When the first Ponton-series Mercedes appeared in 1953, it set a blueprint that has carried through generations. EQ models, despite being technically impressive, didn’t tap into any of that lineage. Without heritage to lean on, they had to build resonance from zero, and that is no small task.
Some manufacturers avoid this trap entirely. Stellantis, for instance, treats electric power as just one propulsion choice among many. A Peugeot 208 or Vauxhall Astra is still first and foremost a 208 or Astra; the customer picks the powertrain afterward. This approach lets Stellantis adjust production according to market demand without creating new nameplates that live or die with EV adoption cycles. Customers get familiarity and consistency. The company gets flexibility. It’s a pragmatic middle ground.
But if this is the logical route, why do some manufacturers still succeed with dedicated EV sub-brands? Hyundai’s Ioniq line is the clearest example of a sub-brand that works. The Ioniq 5 and Ioniq 6 captured attention through bold design, clear identity, and a tech-forward ethos. Their styling signaled modernity without rejecting Hyundai’s broader brand values. They also didn’t replace or compete directly with long-standing Hyundai nameplates with deep emotional roots. There was no iconic saloon or SUV lineage for an Ioniq model to undermine. Instead, Ioniq became a way for Hyundai to articulate its future without stepping on the toes of its past.
Skoda is in a similar position. It lacks decades-old reputational weight in certain segments, particularly compact crossovers. For that reason, offering separate EV and ICE models with distinct names doesn’t confuse customers or dilute brand expectations. If Skoda were to electrify a long-standing, heritage-rich model like the Octavia, expectations would change. That’s why the naming strategy would likely shift too. Brand heritage can be an anchor or an opportunity, depending on the segment.
Then there are the cases that sit somewhere in the middle — Volkswagen and BMW. Volkswagen’s ID range started as a clean-sheet EV family, but the company now appears to be retreating toward familiar naming. An ID Polo may not remain an ID for long. Customers know the Polo. They trust the Polo. And as EVs go mainstream, the differentiation becomes less useful than the reassurance of familiarity.
BMW, meanwhile, uses the i-badge approach, but with more fluidity. The i4 feels like an electric 3 Series by another name, and the upcoming Neue Klasse EV will be called the i3 — despite the original i3 being a completely different concept. Strangely, this works. BMW’s approach feels evolutionary rather than disruptive. The badge signals modernity and electrification but doesn’t reject the lineage of the core series models. It’s a balancing act between novelty and continuity.
So what makes an electric sub-brand succeed? It boils down to alignment between brand heritage, customer expectations, and the segment in question. Sub-brands work when they don’t intrude on emotionally significant nameplates or when their design and messaging are compelling enough to justify standing apart. They fail when they create unnecessary distance from a company’s strongest assets — its history, its identity, and the names that customers have trusted for generations.
At the end of the day, the most effective EV branding strategy isn’t universal. It’s contextual. Some brands need a clean slate. Some need continuity. Some can dance between both. And sometimes, as with Mercedes EQ, the vibes simply don’t match what customers associate with the badge on the grille.
What matters is that the identity — whether new or inherited — resonates. That’s what turns a powertrain transition into a brand success rather than a branding misstep.
