Mercedes-Benz reconsiders all-electric shift by 2030, opting to sell combustion engines into the 2030s, adapting to market dynamics.
This revelation comes as a strategic response to the evolving demand for electric vehicles (EVs) and the challenges faced by the automotive industry.
Adjusting to Market Dynamics
Mercedes-Benz CEO, Ola Källenius, conveyed this significant shift during the company’s earnings call, emphasizing the need to adapt to changing market conditions.
The initial plan, announced in 2021, aimed for a complete shift to electric wherever feasible by 2030. However, the recent announcement indicates a more pragmatic approach, acknowledging the current challenges in the global demand for EVs.
Electrified Drivetrains
Initially targeting 50 percent of sales to comprise either electric or plug-in hybrid vehicles by 2025, Mercedes-Benz now aims for “up to 50 percent” in the second half of the decade.
This adjustment reflects the brand’s flexibility in response to the intricate landscape of the electric vehicle market.
Jefferies bank analyst, Philippe Houchois, notes that this decision aligns with the unpredictable journey toward EV adoption, especially in regions like North America.
Mercedes-Benz has experienced a dip in demand for electric vehicles, with projections indicating a plateau in the share of plug-in cars at 19-21 percent of overall sales in 2024.
The Complexity of Transition
Källenius acknowledges the enormity of transforming the entire energy infrastructure behind mobility, recognizing the peaks and troughs in this transition.
Despite the challenges, he assures that Mercedes-Benz’s MRA2 platform, underpinning the new Mercedes-Benz E-Class, can be updated into the 2030s.
Sustaining Combustion Engines
Mercedes-Benz plans to extend the life of combustion vehicles by introducing a new hybrid-focused four-cylinder engine in 2026, designed to meet the stringent Euro 7 emissions standards.
Källenius highlights the company’s commitment to maintaining a diverse lineup, ensuring a seamless transition to an electrified future.
Future Electric Ventures
While continuing to produce combustion-engined vehicles, Mercedes-Benz is actively pursuing its electric future. The upcoming CLA EV sedan in 2025, built on the new electric MMA (Mercedes Modular Architecture) platform, signifies the brand’s commitment to cutting-edge electric mobility.
Cost Challenges
Acknowledging the need for cost reduction in the electric vehicle segment, Källenius reveals plans to incorporate cheaper lithium-iron-phosphate (LFP) batteries in some future electric models.
The goal is to decrease battery costs by 30 percent in the coming years through innovative design optimization and strategic negotiations with suppliers.
In India, Mercedes-Benz showcases its dedication to electric mobility with offerings like the EQE SUV, EQS, and EQB EVs, with the highly anticipated all-new E-Class sedan slated for release later this year.