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The full-size luxury EQS sedan will launch on Thursday and could completely change the public perception of Mercedes, analysts say.

The newest all-electric luxury vehicle from Mercedes-Benz has the potential to improve the perception of the entire brand and will be a "Tesla fighter," according to Deutsche Bank.

Analysts at the bank said on Monday that the launch of the full-size luxury EQS sedan "could be a game changer" for Mercedes-owner Daimler, as well as other German original equipment manufacturers (OEMs), like rivals Volkswagen Group and BMW.

Daimler stock rose near 2% in Frankfurt trading on Monday and shares in Tesla $(TSLA)$ were up more than 3% in New York by midday.

The EQS is set to launch on Thursday, and Deutsche Bank analysts led by Tim Rokossa "believe the car will likely set the benchmark in terms of technical features, as well as design and quality" across battery-electric vehicles (BEVs).

The car will be Mercedes' first on its new dedicated electric-vehicle architecture and will have a range of up to 770 km (478 miles). That will make it the longest-range BEV on the market, the analysts said, competing with perhaps only Tesla's Model S Plaid+.

Tesla's Plaid has an estimated range of 628 km and the Plaid+ should be able to run for 837 km, but the Deutsche Bank analysts noted that these are estimated figures from the company.

The quality of the EQS' interior and the inclusion of the new hyperscreen "makes the EQS probably the first real 'luxury BEV,' on the market," the analysts said. Mercedes' hyperscreen, introduced earlier this year, turns nearly the entire dashboard into a display interface that uses artificial intelligence-enabled software.

The team at Deutsche Bank also said that the new sedan could help shift the public perception of Mercedes from legacy carmaker to luxury electric-vehicle company, "which should be appreciated by investors."

Deutsche Bank is largely bullish on Daimler, and has a target price of EUR80 ($95) on the stock--suggesting the shares have legs to climb more than 6% higher. The German bank likes the group's electric-vehicle strategy, which focuses on the luxury Mercedes-Benz brand to boost profits, as margins are wider at the premium end of the car market.

Daimler, like other European automobile makers, is leading a monumental shift to transition away from vehicles powered by internal combustion engines in favor of electric vehicles.

Europe became the world's largest market for electric vehicles in 2020 amid a pedal-to-the-metal push to increase EV adoption, with severe fines for car markers whose fleets don't meet new emissions targets and generous incentives for buyers to trade in their gas guzzlers.

The pivot toward electric vehicles in Europe has benefited domestic manufacturers and largely come at the expense of Tesla. Tesla's delivery volumes in the 18 key European markets fell by 12% in 2020 from 2019 levels, according to data compiled from official sources by automotive analyst Matthias Schmidt .

According to Schmidt, who publishes the European Electric Car Report , this saw Tesla's market share of the key European battery-electric-car market more than halved--from 31% in 2019 to 13.2% in 2020.

Tesla controls 7.5% of the European market to Daimler's 7.7% so far in 2021, according to Schmidt, though the American company led by Elon Musk is expected to capture more market share as the year progresses, because its delivery schedule is weighted toward the end of each quarter.

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The analysts believe that the EQS "has the potential to change investors' view of what (some) traditional automakers are capable of in this new EV world, supporting stock multiples." Volkswagen stock has been the most high-profile legacy recipient of investor attention amid an electric-vehicle boom, with shares in the group up 57% this year as the market has started treating it as an EV stock . Daimler stock is up a comparable 33% so far in 2021.