Mercedes-Benz is backing down from its lofty EV transition plans it first announced in 2021, and will now sell internal combustion engine (ICE) vehicles “well into the 2030s”, CEO Ola Kallenius said in an earnings call last week.
The German carmaker has previously said that it will become a fully electric brand “where market conditions allow” by 2030, with electrified vehicles (hybrid and BEV) targetted to make up 50% of its European sales by 2025. But now, the latter has been delayed to “the second half of the decade”.
Mercedes-Benz’s pullback comes as market demand for EVs have started to wane. While record global EV sales are expected for 2024, experts have warned that the rate of growth of EVs has started slowing down. Correspondingly, Mercedes-Benz is expecting the share of its “xEV” vehicles to maintain at 19-21% of new car sales, similar to 20% in 2023.
“Artificially trying to hit the number by pushing product into the market doesn’t make sense,” Ola Källenius told investors on the company’s earnings call on Thursday. “Changing the whole energy infrastructure behind mobility is a very, very big task. We have to realise that there can be peaks and troughs in this transition.”
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Despite the revised targets, Mercedes-Benz says it will still maintain its goal of net-zero emissions across its line-up and supply chain, and will continue to pursue its target of an 80% reduction in emissions produced by its new-car line-up by 2030, as compared to 2018 levels.
For its future ICE models, the company is also currently developing new hybrid-focused four-cylinder engines with Geely, which will launch in 2026 to meet new Euro 7 emissions standards, Autocar reports. “We’ve got the powertrain line-up and we have the infrastructure to continue to produce [combustion-engined vehicles],” Kallenius said. “It’s almost like we will have a whole new fresh line-up in 2027 that can carry us well into the 2030s.”
The German carmaker is also still not taking its foot off the pedal on its investments for EV development. The next big step for Mercedes-Benz’s EV efforts will be the CLA, which is set to arrive some time in 2025. The upcoming fully-electric Mercedes-Benz CLA will also see the debut of the marque’s MMA platform for compact to mid-sized electric models, which it says will “set standards” in efficiency and charging time, as well as a reduction of “more than 30%” in battery costs in the next few years.
The electric modular MMA platform will allow for vehicle range upwards of 750 km, boasting an energy consumption as low as 12 kWh/100km. It will also allow for DC fast charging of up to 300 kW, enabling an additional 400 km of range in just 15 minutes of charging.
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