Subaru Outback vs Mercedes-Benz E220

What's the difference?

Over 30 years and seven generations of Outback in Australia, the latest might just be the best.

It's great to drive, even better to sit in, very easy to live and willing to go further than most equivalent large SUVs at its price point.

The styling is definitely divisive, with purists unhappy that the long, crossover wagon silhouette is now gone, but what we have instead is a family-friendly vehicle that pleases on so many fronts.

We’d go as far as saying the latest Outback might be the most-rounded Subaru currently available, and great value to boot. And the base AWD is all the SUV most people will ever need.

That’s not bad for something this square!

Note: CarsGuide attended this event as a guest of the manufacturer, with travel, accommodation and meals provided.

Given Mercedes-Benz's rich heritage with station wagons, it is a bit of a shame Australia’s preference for SUVs has reduced the line-up to just one variant this time around.

I'm glad they've picked the All-Terrain to fly the flag though, and Merc wagon loyalists should appreciate the extra versatility of its dirt road ability - if they're not mourning the loss of the extra two seats in the rear. Like the rest of the current E-Class range, the E 220 d All-Terrain is an excellent product overall.

Historically, Subarus have majored on quirky. Kooky even.

Think buggy ‘60s 360, offbeat ‘70s 1400, spacey ‘80s Vortex, futuristic ‘90s SVX, Alfa-esque ‘00s pre-facelift Tribeca, dorky ‘10s Exiga. We’d go as far as saying that, in over 50 years, only a handful of Subarus have looked normal. And they’ve all been boring. The beautiful ones, like the original Impreza and ’03 Liberty, remain stunning.

But quirkifying such an important family car in such a mainstream segment… that's risky. And we’re here for Subaru’s boldness. We just wish the details weren’t so heavy handed.

Longer, larger and wider than any prior version, the 2026 Outback shares its stretched platform architecture fundamentals with the latest Forester. That’s a sound basis. Just Xeroxed up by about 15 per cent. Boxy shape. Deep glass. Wide doors. Form over function. This is designed to make life easier.

What you make of the Wilderness’ visual features, including the dramatic grille mask, SUBARU wording, painted trim surrounds and cladding-on-cladding (behold the Kia Tasman-like squared-off wheel arches if you dare) is down to personal taste. Eyes be damned! But it is so far-removed from the elegant grace of the previous model that some might argue a name change would at least have silenced the critics.

On the other hand, besides fugly being in Subaru’s DNA, a large, lofty SUV is probably truer to the term ‘outback’ than on any elegant and gracefully-silhouetted crossover wagon.

Meanwhile, the polar opposite is true inside. It’s as if the interior designers strove for class and calm, with none of the exterior styling’s visual noise, or shouting in the Wilderness’ case. And there is the luxury of space, vision and scope, further enhancing the Outback’s usefulness. That you can’t see the body, just the beautiful cabin’s detailing, elevates this Subaru. Unlike in the previous model, which was a bit of an aesthetic and functional mess inside.

The All-Terrain styling pack is comprised of tough-looking front and rear bumpers, with unpainted plastic side skirts and wheelarch flares on all corners. This will all be welcomed by anyone who travels regularly on dirt roads, but the All-Terrain bits will also provide a handy disguise from urban parking scrapes.

The double-blade grille, wheels and roof rails are also bespoke to the All-Terrain, and the net result is a distinct personality that should satisfy the majority of previous E-Class Estate buyers previously opting for the AMG styling pack.

Interior trim is based on the regular E-Class Avantgarde package, but with specific rubber studded pedals and All-Terrain branded floor mats to align with the exterior treatment.

In the default suspension setting, the All-Terrain sits 29mm higher than a regular E-Class. Taller tyres make up 14mm of this, while the remaining 15mm is thanks to an elevated 'Air Body Control' air suspension. A further 20mm of lift is available with the All-Terrain drive mode selected, but only at speeds up to 35km/h.
 
The All-Terrain’s 20-inch alloys are a staggered fitment with 245/40 tyres up front and 275/35 at the rear, while taller-sidewalled 245/45R19 at each corner are a no-cost option, and essential if you wish to use snow chains.

Like the Estate available internationally, the All-Terrain rides on the same 2939mm wheelbase as the E-Class sedan but gains an extra 24mm in rear overhang to measure 4947mm overall.

The wagon body, extra kit and all-wheel drivetrain also add an extra 240kg to the kerb weight over the E 220 d sedan, with the All-Terrain tipping the scales at 1920kg.

Like all Subarus, Outback boasts an interior of very high-quality craftsmanship, being built beautifully, without rattles or noises or jarring trim.

The difference here is just how pleasingly practical and easy yet attractive this environment is, from the moment that wide-opening door opens and shuts with reassuring solidity.

The horizontal dash layout departs from the Tesla-aping portrait screen domination of the previous generation, banishing the confusing and annoying virtual controls for real, live buttons.

But is it original? The layered presentation is attractive and distinctively Toyota… err Subaru. Yes, it is very much like the bZ4X-based Solterra EV’s look inside.

That’s no bad thing from an ergonomic point of view. The driving position is flawless, the seat/wheel/controls relationship considered and the placement of the climate controls, audio system, armrest and storage just right. We’re also happy to see the instrumentation display incorporate various visual choices, including digital analogue-style dials.

A particular callout goes to the slick and speedy tactility of the brand’s latest touchscreen, as well as the (again suspiciously Toyota-like) interface and graphics layout. It’s all good.

But wait, there’s more. The Outback’s front seats are claimed to be particularly supportive, and after hours in them on and off road, they seem to exceed Subaru’s claims.

If you’re expecting regular mid-sized SUV levels of interior space, be prepared to be impressed, because the Outback’s extra sizing outside seems to be multiplied inside. There’s ample room for long legs, big hats, broad shoulders and buxom hips. It all works so well. This is probably one of the best modern SUV interiors, period. Nothing seems to have been overlooked.

The rear seat is presented to please, too. It can seem a bit drab in the lower-line models, but the same virtues of effortless entry/egress, seat comfort, convenience (including air vents, USB ports, cupholders and armrest placement) apply. We noted the lack of road/tyre noise intrusion at speed, too.

Behind the very sixties Jeep Wagoneer-looking rear is a vast luggage area, complete with a low floor, remote rear-seat folding handles, 12V outlet and quality trim. And that space-saver spare lives underneath.

Subaru seems to have designed this car from the inside out and it shows. A rare 10/10 from us.

Aside from the All-Terrain’s rugged looks, the greatest departure from E-Class Estate tradition is the omission of the third row of seats, which makes this one a strict five-seater.

One could argue that the Estate’s traditional rearward-facing third row is a bit old school next to the forward-facing setup used by seven-seat SUVs like the GLS, but it's a shame given the third row is still available in other markets.

The All-Terrain does offer a vast cargo area however, with an extra 130 litres (VDA) over the sedan with the seats up to total 670 litres (VDA). Seats down, this extends to 1820 litres (VDA), but it’s worth noting that both wagon figures are marginally smaller than the previous Estate’s 695/1950 measurements.

Facilitating full use of this space is the classic Merc Estate retractable cargo net, and a 670kg payload promises good scope for loading beyond a full passenger count. The air suspension will also automatically maintain a level ride height regardless of load.

As with all current E-Classes, there are bottle holders in each door plus two cupholders front and back and ISOFIX child seat mounts in the outward rear positions.

As per the non-AMG Mercedes passenger car norm, run flat tyres take the place of a spare tyre, but a space saver can be optioned to sit above the boot floor.

The All-Terrain theme follows the same path taken by key rivals Audi and Volvo with the A6 Allroad ($112,855) and V90 Cross Country ($99,900), which leaves BMW’s upcoming 5 Series Touring as the sole option in this segment not to adopt the semi-SUV look.

The $109,900 Mercedes is priced right between the Audi and Volvo, but note that the Audi brings a more powerful V6 to justify its slight premium.

The All-Terrain is available with a V6 internationally, but the 220 d four-cylinder diesel was selected for Australia as it's the closest match for the E 250 d that proved the most popular variant last time around.

Compared with a similarly specified E 220 d sedan (which kicks off at $92,900), Mercedes reckons they're about the same on price, but the All-Terrain throws in the wagon body and all-wheel drive pretty much for free. The All-Terrain also offers a significant value improvement over the previous E 250 d Estate which bowed out at $107,900.

Key inclusions for the All-Terrain over the already opulent E-Class are genuine leather trim, proximity unlocking, widescreen dash instrument that spans two thirds of the cabin, LED 'Multibeam' headlights, underbody protection and 20-inch twinned five-spoke alloys.

Don’t worry, Subaru traditionalists. The Outback again offers a pair of horizontally-opposed 'boxer' four-cylinder engines.

The regular Outback versions are powered by a 2.5-litre twin-cam petrol unit making 137kW of power at 5800rpm and 254Nm of torque at 3700rpm.

Choosing the Wilderness switches things up to a 2.4-litre turbo version delivering 194kW at 5600rpm and 382Nm between 2000rpm and 3600rpm.

Both use a continuously variable transmission (CVT) with eight artificial ‘steps’ for a more torque-converter-like experience. Sadly, no manual gearbox is available.

The All-Terrain’s excellent 2.0-litre turbo-diesel engine and nine-speed torque converter auto are carried across from the E 220 d sedan, which produces a decent 143kW/400Nm. Max torque is available from 1600-2800rpm.

The All-Terrain is the only Australian E-Class to pair this engine with the '4Matic' all-wheel drivetrain though, which uses a slightly rear-biased (45/55) torque split in this application.

Where the Outback regresses compared to its predecessor is efficiency.

Despite a modest 50kg weight rise, the substantially boxier shape is probably behind the jump in petrol consumption, rising nearly one litre per 100km compared to before in the Outback, and nearly 2.5L/100km, in the heavier Wilderness.

The combined average consumption figure for the 2.5-litre naturally aspirated engine is 8.1L/100km, for a carbon dioxide emissions rating of 183 grams per kilometre, while the 2.4-litre turbo manages 9.7L/100km and 228g/km.

Filling the 63L tank, expect an average range of about 777km in the former and just 648km in the latter. Surely, the coming hybrid version can’t arrive soon enough for some buyers.

At least both engines can drink from the standard 91 RON petrol bowser.

So much for the theory. Out in the real world, over a solid day's testing on- and off-road, we found there was a difference of about 1.5L/100km between the regular Outback and the Wilderness.

The All-Terrain’s extra 240kg and no doubt less slippery body add 1.6L/100km to the E 220 d sedan official combined fuel consumption figure, but the wagon’s 5.7L/100km claim is still very impressive for a taller body nudging two tonnes. 

At this rate, the E-Class All-Terrain has a theoretical range of 1157km from its 66-litre fuel tank.

Confession time. The way the previous Outback drove was profoundly disappointing. The steering felt numb, the ride was too stiff and the car seemed wilfully dull, even in the turbo version.

The contemporary Forester ran rings around it for driving pleasure and refinement.

But Outback number seven is completely different and maybe the best-driving non-WRX Subaru right now.

From the moment you climb on board this vast SUV from Japan, everything feels right – from the driving position and relationship with the controls, to the sumptuously comfy seats and commanding vision all around the vehicle. That’s a promising start.

Push the ignition and press the accelerator down, and the regular Outback 2.5 quietly, gently and smoothly moves off the line. With modest power outputs and a CVT, you might expect it to also sound revvy and droney, but instead the acceleration is strong and throttle responses determined.

We drove this for hundreds of kilometres and never found the performance lacking, even with three adults and their luggage on board, over hilly and even mountainous terrain. Yes, it is possible to have the CVT whining at higher revs, but not within normal driving scenarios. And the quietness and lack of road noise is terrific.

Moving to the Wilderness and its 2.4-litre turbo powertrain, the same applies, except of course mid-range response is significantly faster and with a slicker, more refined delivery. Press and squirt, this is deceptively quick, because the car does a great job in masking the noises and vibrations that working an SUV hard often elicit.

We only wish there was a manual option. With steel wheels, cloth seats and without the Wilderness' add-on gargoyles.

Now, it also seems that Subaru listened and learned from previous criticisms like ours, because the Outback’s newly-redesigned steering is a delight, with a natural, fluent sweetness and ease that’s combined with a pleasing connection with the driver.

The result is balanced, controlled and enjoyable handling, backed up by reassuringly stable road holding. We drove through a sudden, heavy thunderstorm near Bathurst on the first, hot summer afternoon’s test session, and found the Outback to feel impervious through such slippery conditions.

And this all largely applies to the Wilderness as well, though its 20mm-higher ground clearance (to 240mm) makes it feel a little less composed than the glued-down regular model. Both feature a stiffened body and multi-link rear suspension, by the way.

More progress has been made in the Subaru’s ride quality. Gone is the hard suspension feel, for a far-less firm set-up, providing a comfortable and queasy-free ride. Even in the loftier Wilderness. This is the model’s greatest advance over its predecessor and we’re extremely happy with the outcome.

Finally, other than the at-times over-eager driver-attention monitor, the ADAS tech provides subtle, nuanced back-up, with quiet lane-keep intervention, a measured adaptive cruise-control functionality and no jarring buzzes and warnings.

We also enjoyed a session taking both grades off road, to show off their 4WD prowess. The clearances are ample, the hill-descent tech effective and the ability to scramble over wet rocks impressive. The Wilderness especially may even live up to its name!

This is a difficult SUV to fault. The Outback’s breadth of capability on and off the beaten track give it an unusually wide bandwidth for what is a monocoque bodied family convenience. That there is so much sophistication and fun to be had as well make this so much better to drive and live with than the disappointing old version.

We can’t wait to get to know the latest Subaru better on more familiar roads.

Climbing aboard the All-Terrain, there’s a sense you're seated higher than its 29mm static ride height lift suggests. It's probably mostly psychological, and borne from the All-Terrain styling treatment, but something SUV fans will probably appreciate.

Otherwise it's mainly W213-generation E-Class from the driver's seat, which is a very good thing.

However, the extra 240kg of Estate body and All-Terrain spec over a regular E 220 d sedan is just enough to put a dent in the 2.0-litre diesel's performance. Mercedes claims an 8.0sec 0-100km/h figure, which is still more than enough to keep up with traffic, but just not as spritely as the sedan’s 7.3sec figure.

The combination of airbag suspension and the All-Terrain’s slightly taller tyre sidewalls help the wagon ride commendably well. There's no disguising the large-diameter 20-inch wheels over sharp potholes, but the experience is generally even better than we recall from any other existing E-Class.

The steering also feels slightly heavier, as though the level of assistance has been tuned for a touch more weight to add to the All-Terrain’s semi-SUV aura. If our perception is correct, it only adds to the sense of substance from the driver’s seat.

Its overall composure is maintained on dirt too, with the All-Terrain’s Victorian launch route offering a good dose of gravel and muddy unsealed roads. The all-wheel drive system keeps you pointing where you want and enables clean acceleration from the greasiest of corners. All of this highlights the All-Terrain’s potential as a ski field chaser.

We also detoured via some moderate fire trails, which gave us the chance to try the All-Terrain driving mode that lifts the suspension an extra 20mm and slackens the stability control and ABS to better suit low grip scenarios.

At speeds above 35km/h it reverts to Comfort mode, but will return to All-Terrain settings if you slow down again. In Sport mode or above 125km/h, the suspension lowers 15mm below normal to reduce aerodynamic drag. Even at full height it won’t challenge a GLE for clearance, but it’s significantly more capable than regular E-Class models.

Like all versions of the current E-Class, the All-Terrain carries the maximum five star ANCAP and EuroNCAP safety ratings. A brilliantly integrated suite of active and passive safety features represents the forefront of occupant and pedestrian protection, which goes well beyond its AEB, nine-airbag count, 360-degree parking cameras, rear cross-traffic alerts, and a pedestrian-protecting active bonnet.

These systems work in harmony to enable semi-autonomous driving, which is perhaps the greatest technical advancement of cars since we stopped riding horses.

Subaru offers a five-year/unlimited kilometre warranty, and that also comes with 12 months of roadside assistance.

Now, that's pretty average nowadays, so nothing special, particularly when other SUV companies like Mitsubishi, Nissan and MG offer conditional 10-year warranties.

Service intervals are at 12 months or 15,000km for both engines. There is a capped-price servicing offer covering this timeframe. They are currently listed at approximately $350, $530, $405, $705 and $370 for an average of $472 per workshop visit.

There are 128 dealers or authorised Subaru service centres across Australia as of January 1, 2026.

The E220 d All-Terrain is covered by Mercedes’ three-year, unlimited kilometre warranty, with service intervals pegged at either 12 months or a generous 25,000km.

Mercedes is yet to confirm capped service pricing for Australia, but we don’t expect the All-Terrain to stray too far from the $556, $1112 and $1112 figures applied to the E220 d sedan’s first three services.