source: AutoCar interview / AutoBild article
Mercedes Shifts Gears: Dual Strategy Embraces Both Electric and Combustion Engines
• Mercedes abandons all-electric strategy in favor of parallel development of EVs and combustion engines
• Company missed its 2024 EV sales targets (10% achieved vs 50% goal)
• CEO Ole Källenius acknowledges unexpected poor EV sales performance
• Mercedes will integrate EV models into traditional nomenclature (example: 'G 580 with EQ-Technology' instead of 'EQG')
• Investment in software and electronics now exceeds traditional construction costs
• Company will continue developing both platforms rather than transitioning solely to electric
• Existing combustion engine platforms will be extended longer than initially planned
Mercedes-Benz has announced a significant shift in its strategic direction, moving away from its previous all-electric commitment to pursue a dual-track approach that maintains development of both electric and combustion engine vehicles. This strategic pivot, revealed by CEO Ole Källenius in an interview with "Autocar," comes in response to slower-than-expected EV adoption rates and continuing market demand for traditional combustion engines.
The company's original target of achieving 50% electric vehicle sales (including full electric and plug-in hybrids) by 2025 has fallen short, with only 10% achieved in the first half of 2024. This market reality has prompted Mercedes to extend the lifecycle of several combustion engine platforms, including the A-Class MFA2 platform through 2026, and other combustion engine series like GLC, E-Class, and GLS for up to ten years.
Källenius emphasized the business logic behind this decision, stating, "If the market is 50:50 in 2030, it would be foolish to leave half of the business behind." The CEO also noted that investment in software and electronic architecture for new models now exceeds traditional construction costs, highlighting the evolving nature of automotive development.
• "We have spent 100 years or more perfecting the combustion engine car. Customers will not accept if we take a step backward." - Ole Källenius
• "Market conditions and the wishes of our customers determine the pace of transformation." - Mercedes statement to AFP
• "In the coming years, there will be both: electric cars and highly modern, electrified combustion engines." - Ole Källenius at shareholders' meeting
• "If the market is 50:50 in 2030, it would be foolish to leave half of the business behind." - Ole Källenius
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