Mercedes-Benz will focus entirely on electric vehicles in 2025 and be ready to sell only electric cars by 2030, the company said on Thursday, adding a caveat that the transition would depend on “market conditions.”
Mercedes thus joins a growing list of companies including General Motors, Stellantis and Renault who have declared their intention to accelerate the demise of internal combustion engines in favor of battery-powered vehicles with no tailpipe emissions.
More and more, they have little choice. The European Union will effectively ban new cars with internal combustion engines in 2035, while Britain, Norway and other countries have also set expiration dates for vehicles running on fossil fuels.
Mercedes, Daimler’s luxury auto division, is also coming under pressure from Tesla, which has robbed affluent buyers and built a factory in Berlin. Tesla leads its competitors in the field of batteries and autonomous driving technology. But Ola Källenius, CEO of Daimler, said Mercedes wants to take the lead with, for example, a model that will be unveiled next year that will cover 600 miles under load. That would be about 50 percent farther than Tesla’s longest-range car.
“We want to be the people to make this happen,” Källenius told reporters on Thursday, “not just go with the flow”.
Mercedes has announced that it will invest 40 billion euros, or $ 47 billion, in electric cars, vans and light commercial vehicles by 2030. In 2025, the company will introduce three new electric vehicle platforms – collections of components and technologies that can be shared between different models. – and will no longer develop platforms for internal combustion engines.
The platform change is important because it will allow Mercedes to exploit some of the design potential of battery-powered vehicles, such as more interior space. Electric motors are smaller than internal combustion engines and do not require large transmissions.
Despite the huge investments required, Källenius said he was confident Mercedes could continue to enjoy profit margins of more than 10 percent. Electric vehicles have generally been less profitable for automakers due to the cost of batteries, but Källenius pointed out that battery prices have fallen rapidly.
Mercedes plans to take tighter control over battery production. Together with partners, it will establish a global network of battery factories and also build its own electric motors.
One of the new battery factories will be in the United States, three in Europe and four in Asia. Daimler executives said they have not yet decided on the location of the US plant, but that it will likely be close to Mercedes’ existing manufacturing complex in Tuscaloosa, Ala.
Daimler did not promise to stop selling cars with internal combustion engines. Some parts of the world by 2030 may not have the charging networks that make owning an electric vehicle convenient.
“Mercedes-Benz will be ready to go all-electric at the end of the decade,” the company said in a statement, adding “where market conditions permit”.