Mercedes-Benz CEO Says AI Shift Outweighs EV Transition

Mercedes-Benz Group AG chief executive Ola Källenius said on Thursday that the shift toward artificial intelligence and autonomous driving is a bigger transformation for carmakers than the move to electric powertrains.

Addressing the 66th annual convention of the Society of Indian Automobile Manufacturers via video link, Källenius called electrification a "once-in-100-years" change for the industry. Then he went further.

"I would argue, technologically, what's happening on the digital side is even bigger," he told delegates. He forecast "a massive, massive scaling and adoption of different types of automated driving" over the next three to five years, after what he called ten years of work to get there.

India, he said, sits at the centre of that shift. Mercedes' Bangalore engineering base, its largest outside Germany, now employs about 8,500 people and turns 30 this year, a milestone he plans to mark in person this autumn. "There's a piece of India in every Mercedes-Benz," he said, adding that the centre carries "worldwide responsibility within Mercedes-Benz for many systems and components."

He acknowledged that the brand's sales volumes in India remain small by global standards, even as it holds its lead in the premium segment. He floated local assembly as India's next growth lever, asking, "When is the time where you can really go big in India, maybe even go into part by part someday?" He also welcomed the India-EU trade pact, saying, "Europe is more open for business vis-à-vis India, and India is more open for business vis-à-vis Europe."

His remarks followed a presentation by McKinsey senior partner Nitesh Gupta, who told the gathering that 88% of automotive companies use AI in some function, but only about 6% report a meaningful impact on profitability.