Tesla is no longer the only game in town as mainstream automakers like Volkswagen and Mercedes-Benz launch their own respective electric vehicle lineups. While the California-based automaker has a nearly decade-long head start in gaining customers and acquiring technological know-how, its rivals know a thing or two about the auto industry too. However, Mercedes' EV approach will be different from that of Volkswagen, at least when it comes to vehicle segments.

Autocar spoke with Mercedes R&D chief Markus Schafer about not only the upcoming EQA EV crossover but also the potential for smaller EVs, such as hatchbacks like the Volkswagen ID.3. Schafer made loud and clear the company's position.

"We have to watch customer demand and, at the moment, SUVs and crossovers are the absolute favorites. Those are our first priorities."

In other words, Mercedes has no immediate plan to launch an EV hatchback alongside the already on sale Mercedes EQC SUV. This policy makes sense because Mercedes buyers, in general, opt for larger vehicles, including sedans. That's why the S-Class-sized EQS flagship is also in development. The production version of the EQA will be a crossover similar in size to the GLA, albeit with a different powertrain.

If you recall, the EQA Concept was a hatchback roughly the size of the A-Class hatchback (in the US, there's only the Mercedes A-Class Sedan in this size segment). While VW plans to only sell the ID.3 in Europe and other overseas markets, it realized early in the planning stages it'd be useless to do so in the US. The VW ID.4 crossover will be sold here instead.

But there's another reason why Mercedes won't do an EV hatchback: pricing. Customers likely wouldn't be willing to pay a premium for a hatch. Also, an EV hatchback and EV crossover selling in the same market would instantly become internal competition. Given the ever-increasing popularity SUVs and crossover enjoy, this decision is a no-brainer for Mercedes.

VW can get away with its dual EV hatchback and crossover approach for the time being, but even outside the US, crossovers continue to win over hatchback and sedan buyers alike.