Thursday, April 25, 2024
NewsMercedes Backtracks, Says Going Full Electric by 2030 is Unrealistic

Mercedes Backtracks, Says Going Full Electric by 2030 is Unrealistic

Mercedes-Benz wants to adopt a more diversified approach to sustainability.

  • The company had previously announced it would go fully electric where market conditions allowed.

  • The automaker now wants to keep selling combustion-powered cars, with a stronger focus on PHEV models.

  • New internal combustion engines will continue to be developed.

Mercedes-Benz will not only sell electric vehicles in 2030 after all, backtracking on a promise it had made back in 2020.

A few days ago, the automaker’s CEO, Ola Kallenius, said that the company had been too optimistic and that expecting to discontinue the sale of gasoline-powered models by the end of the decade is unrealistic.

Mercedes-Benz had initially announced it wanted 50% of its sales to consist of electric vehicles in 2030, but the announcement of the EU’s ban on vehicles powered by combustion engines in 2035 spurred the automaker to significantly strengthen its commitment to EVs.

Indeed, the German automaker revised its plans to say it would only sell electric vehicles on markets where conditions allow it, such as Europe and North America, by 2030.

Now, Mercedes is going back on this promise and it intends to continue the sale and development of gasoline-powered models for years to come.

Future EVs from Mercedes-Benz will be more expressive

Many reasons can explain this latest change in direction, most notably the slow sales of its current electric models, which are much more expensive than their combustion-powered counterparts.

Another reason could be the automaker’s strategy of targeting higher profit margins rather than higher sales volume since despite their higher price, EVs are usually less profitable than traditional models due to their elevated production and development costs.

In addition, changes to local EV rebates on some key markets, such as those included in the Inflation Reduction Act in the US, mean that most Mercedes-Benz electric vehicles are no longer eligible to tax credits, making them less attractive to potential buyers.

This new direction for the future doesn’t mean that Mercedes is abandoning electric power since the company says it still believes in the long-term potential of this type of vehicles.

Instead, the automaker is aiming for a more diversified approach that will allow it to keep its high margins and better adjust to consumer preferences.

Part of this plan is a greater reliance on plug-in hybrid models, which should be available in greater numbers in the United States soon, notably in the S-Class, GLC and GLE.

It will be interesting to see if other automakers also end up backing out of similar promises they made a few years ago in the face of changing market and financial conditions.

Source: MercedesBlog

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