Mercedes-Benz Delays Its EV Plans, Will Keep Making Combustion Engines

The company initially planned to be all-EV by 2030, but it said today that EVs will make up 50% of its sales by the end of the decade.

Mercedes EQE 43

Suvrat Kothari

By: Suvrat Kothari

Feb 22, 2024 at 6:28pm ET

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There’s no longer an expiry date on Mercedes-Benz combustion engines. Due to the recent trends of slower-than-expected demand for EVs, the German automaker is recalibrating its EV transition pace, cutting down the number of electric models it expects to sell by 2030 in half, the brand announced today in an investor statement.

Earlier, Mercedes-Benz had pledged to go fully electric by 2030, and permanently consign its combustion engines to the history books by then. But it now plans to continue selling ICE cars well into the next decade. It has halved its EV goals, and pure electric models and hybrids will account for up to 50% of its sales by 2030.

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Mercedes-Benz wanted to go all-electric by 2030.

But that's no longer the plan. The pace of EVs has outpaced consumer demand, which is why several automakers are rethinking their EV approach. Widespread EV adoption is still in the pipeline, but probably not at the same pace as some previous forecasts.

“Unexpected developments may arise in particular from geopolitical events and trade policy,” Mercedes-Benz said in the statement. “Further supply chain disruptions and in particular, availability bottlenecks for critical components, remain a significant risk factor,” it added.

However, the brand would remain “strategically focused” and “tactically flexible,” as it awaits for demand to catch up, charging infrastructure to mature, and the supply chain to streamline. Following the latest development, the carmaker's stock price went up 5.9% and was also supported by a $3.3 billion share buyback program late on Wednesday.

Over the past couple of years, we’ve seen an EV on-slaught from the German automaker in Europe. Even in the U.S., Mercedes-Benz now offers six pure electric models, including the EQB SUV, EQE and EQS sedans and SUVs, and the opulent EQS SUV Maybach. It also sold a record number of EVs in 2023.

Even though Mercedes-Benz CEO Ola Källenius has pledged for his company to go fully electric, he has also stated that the internal combustion engine would die a natural death and that Mercedes-Benz wouldn’t transition “artificially.” In a nutshell, Mercedes-Benz ICE cars would continue to exist as long as customers want them.

How the carmaker plans to continue developing its electrified powertrains would be worth keeping an eye on. Reports emerged in August 2023 of Mercedes-Benz developing its M252 engine to function as a range-extender—a set-up where the engine works as a generator to charge the EV’s battery and functions independently from the electric motors that actually drive the wheels.

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The Ramcharger, some Geely models in China like the Galaxy L7 SUV, as well as the BMW i3 and Chevy Volt are range extenders. The technology improves the EV’s overall driving range by reducing reliance on the battery alone, providing increased flexibility, and eliminating range anxiety for drivers. But the caveat is it still needs fossil fuels for power, which is quite contradictory to what the EV and climate movement is all about.

Next-generation Mercedes EVs are expected to ride on the Modular Mercedes Architecture (MMA), which would be designed for EVs and ICE cars as well. The production version of the new CLA, whatever it will be called in its final form, will be the first model to ride on the MMA followed by the next GLA and GLB models.

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