Daimler AG’s luxury car brand Mercedes-Benz says it is stepping up its transition to electric cars, doubling the planned share of sales by 2025 and sketching out a market scenario in which new car sales would “in essence” be fully electric by the end of the decade.
The company also said that from that year, customers will have the option of buying an “all-electric alternative for every model the company makes”.
The shift to electric vehicles “is picking up speed – especially in the luxury segment, where Mercedes-Benz belongs,” said Ola Källenius, CEO of Daimler AG and Mercedes-Benz AG. “The tipping point is getting closer and we will be ready as markets switch to electric-only by the end of this decade.”
“This step marks a profound reallocation of capital,” he added.
The company is putting more money into research and development. “In total, investments into battery electric vehicles between 2022 and 2030 will amount to over 40 billion euros,” Daimler said in a statement.
The carmaker said Thursday it foresaw half its sales as battery-only or plug-in hybrid cars by 2025, up from a quarter in previous forecasts. In the first six months of this year, such vehicles were 10.3 per cent of total sales. The company sold 39,000 battery cars and 121,500 plug-in hybrids, which combine a battery with internal combustion.
The company’s statement updating its electric-vehicle strategy portrayed going all-electric as a “market scenario” the company intended to be ready for, rather than as a fixed deadline for abandoning sales of diesel or gasoline cars. The company said it was “getting ready to go electric by the end of the decade, where market conditions allow”.
In Europe, the share of electric cars is increasing, heavily driven by regulation and government incentives. Last year, electrically chargeable cars made up 10.5 per cent of the European market.
Mercedes said Thursday that from 2025 all newly launched vehicle architectures would be electric-only, referring to mechanical structures that can be shared among different models.
Cooperating with international partners, Mercedes also plans to launch nine gigafactories to make the cells they need to make their vehicles. This is in addition to plans for the launch of nine plants to develop battery systems.
Daimler said Mercedes is planning to “team up with new European partners to develop and efficiently produce future cells and modules, a step which ensures that Europe remains at the heart of the auto industry even in an electric era”.
The carmaker said it would launch three new electric platforms that year on which new electric-only vehicles will be based. MB.EA is the architecture for medium and large passenger cars, AMG.EA will be the platform for performance cars and VAN.EA will be used for smaller commercial trucks and vans.
The company has said that its model lineup will be climate neutral by 2039 throughout its chain of production but has not specified any date for halting sales of internal combustion engines. For now, sales of highly profitable gasoline and diesel sedans and SUVs are providing the cash to invest in new technologies, such as electric cars.
Speaking to CNBC, Volkswagen group CEO Herbert Diess was asked if he would rule out joining up with Tesla and Elon Musk in the future, in a future deal with Volkswagen making Tesla cars, or if the brands would unite.
“No, we haven’t considered [that], we are going our own way,” he said. “We want to get close and then overtake.”
“We think that we can — we need our own software stack, our own technology,” he added. “And also, I think Tesla, or Elon, is very much thinking … [about] his way forward. So no, there are no talks between Elon Musk and myself regarding joining forces.”
The new Mercedes electric strategy follows proposals from the European Union’s executive commission to tighten limits on carbon dioxide emissions, the primary greenhouse gas blamed by scientists for global warming and climate change.
The latest proposal envisions eliminating C02 emissions from cars by 2035. China is also imposing regulations requiring more zero-local emission cars, while the shift to electric cars has moved more slowly in the United States.
The Associated Press contributed to this report.