Mercedes Doesn’t Want To Prematurely End ICE Sales Despite Prioritizing EVs

This is what CEO Ola Källenius said in a recent interview, citing the robustness of its ICE business and the cash it brings.

By: Andrei Nedelea

Feb 25, 2021 at 9:15am ET

Comment

Daimler, which will soon be renamed Mercedes-Benz, has announced many plans to restructure its business as it prepares to embrace a zero-emissions future. It is through the Mercedes brand that it wants to continue the tradition of making some of the best luxury cars in the world, yet at the same time also embrace electrification.

And even though it is slowly building up a range of full-electric EQ-badged models (as well as PHEV versions of its existing cars), which have a high probability of being successful, the automaker is still not ready to give up on its lucrative internal-combustion engine business. The company’s CEO, Ola Källenius, recently spoke to the Financial Times and said

I think it's too early to definitively say what the market is going to look like in 2030, but it's our job to put ourselves in a position to address that market. Our combustion engine business is extremely robust and produces cash flows that we invest in the future.

So even though Mercedes has announced an ‘electric first’ approach to developing future models (even a possible electric sports car), it clearly is not ready to give up on the engine business yet, simply because it is just too lucrative. This suggests the manufacturer is adopting a more balanced approach to fully switching to electric cars, even though other manufacturers have announced plans to stop selling ICE vehicles as early as 2030.

Mercedes has been around for over a century, and in that century it has almost exclusively sold ICE vehicles, so it is deeply rooted in that tradition. It has dabbled in testing electrified powertrains even as far back as the 1980, but it’s only now that it’s finally starting to embrace what has become an unstoppable trend to make all vehicles electric as soon as possible. Now that Tesla has burst onto the scene and disrupted it, Mercedes is adapting and preparing a range of EVs, but it is doing so at its own pace, without jeopardizing the parts of its business that make the most money.