The criticism Akio Toyoda received from Toyota investors because he is against combustion engine bans in Japan would probably affect Ola Källenius as well. The Mercedes-Benz CEO said in a Financial Times summit that his company will not invest in combustion engines anymore but that it will also not get rid of them “artificially.” While there is demand, Mercedes-Benz will keep on selling them – with adjustments.
While this may be disappointing for EV advocates, it makes perfect sense from the legacy automakers’ perspective. They have billions of dollars invested in machinery, patents, and contracts with suppliers to sell what is used to move people around before electric cars proved feasible.
According to Källenius, “the cash investment lies in the past.” However, that does not mean it does not have to pay itself – something technically called amortization. After the investments have been paid off, all the money that the company can make with those investments’ products becomes profit.
Companies can only refuse to make money from one source if they have other ways of making money, such as carbon credits. When they are no longer necessary, these companies will have to make money with something else to survive – selling cars, for example.
Källenius seems to expect the shift towards electric mobility to happen naturally, which is not something entirely believable. Without some government and consumer pressure, legacy automakers would probably try as hard as possible to keep on selling what they currently do best.
More stringent emission regulations will eventually lead to electric mobility. Källenius said his company would not develop new engines: it will just prepare them to cope with Euro 7 and future regulations. There will be a time when it will be more expensive to build a “clean” engine than to manufacture an electric car.
If electric mobility takes over naturally, Källenius said that Mercedes-Benz would be ready for it. Although the company hesitated for a long time with EVs made on combustion-engined car platforms, the EQS shows the CEO is not full of hot air.
Like Akio Toyoda, what he wants to discuss is whether a forced adoption of EV manufacturing will help personal mobility or jeopardize it. In times in which not everyone can afford an entry-level EV or consider a used one without concerns with their battery packs, that’s a relevant discussion.