Mercedes-Benz has announced that it will continue to sell combustion-engined cars well into the 2030s, revising its earlier decision to become an all-electric brand by 2030. This adjustment comes as the company adapts to changing demand for electric vehicles (EVs).
Revised Strategy
Mercedes-Benz had initially planned to go all-electric by 2030, but CEO Ola Källenius has now stated that the company will continue to offer combustion-engined cars into the 2030s.
Sales Forecast
The company has also modified its sales forecast, now aiming for "up to 50 percent" of its sales to be electric or plug-in hybrid vehicles in the second half of the decade, down from the earlier target of 50 percent by 2025.
Market Dynamics
The decision reflects a more pragmatic approach due to a bumpier road to EV adoption, particularly in North America. Demand for electric vehicles has weakened globally, with Mercedes expecting the share of its plug-in cars to remain flat at 19-21 percent of overall sales in 2024.
New Developments
Mercedes is developing a new hybrid-focused four-cylinder engine with Geely, set to launch in 2026 to meet Euro 7 emissions standards. The company is also working on the new electric MMA (Mercedes Modular Architecture) platform, with the CLA EV sedan being a key upcoming model.
Battery Cost Reduction
Mercedes aims to reduce battery costs by 30 percent in the coming years through design optimization, use of lithium-iron-phosphate (LFP) batteries, and better deals with suppliers. Some future electric models will use LFP batteries sourced from BYD.
Implications for the Future
This shift in strategy indicates that Mercedes-Benz is adapting to the current market realities and challenges in the transition to electric mobility. While continuing to invest in electric vehicles, the company is also ensuring that it remains competitive in the combustion engine market for the foreseeable future.