Mercedes Benz CEO Ola Kaellenius on Thursday formally cast aside the firm's aspiration to stop selling combustion vehicles by 2030, Reuters reported.
Kaellenius said Mercedes now expects sales of electrified vehicles, including hybrids, to account for about half of the global sales by 2030. this is five years later than the forecast from 2021 when the company had projected it would hit the 50% milestone by 2025 with mostly all-electric cars, the newswire reported.
In the reverse, Mercedes expects combustion vehicles will still be about half of sales by the end of this decade.
Instead of winding down investment in combustion engines, as Kaellenius predicted in 2021, Mercedes will invest to keep its “high-tech combustion portfolio” fresh – mainly to supply the range-extending combustion part of plug-in hybrid powertrains.
“The electrified high-tech combustion portfolio will play an equally important role,” in the coming years, Kaellenius told investors. “It’s the backbone of the cash flows” that will fund the new round of share buybacks and dividends that Mercedes promised on Thursday.
Kaellenius – like his counterparts at other established automakers – had always put a virtual asterisk next to statements about the timetable for going all-electric, stipulating that goal was dependent on EV demand and continued government subsidies
The Mercedes rethink amplifies the reality check shaking up the EV industry. Slowing sales momentum, stubbornly high battery costs and relentless price cutting by Chinese automakers have made for a hostile near-term environment for all EV manufacturers – even Tesla, Reuters noted.
In the long term, government climate policy and consumer demand could converge to make electric vehicles the dominant technology.
“The trillion-dollar question is how fast is this going to happen?” Kaellenius said. Neither Mercedes nor any other automaker has $1 trillion available to make a wrong bet. The oldest automaker in the world is worth just $79 billion.