Mercedes-Benz, the renowned German automaker, is making headlines once again by revising its electrification strategy. Despite previous commitments to an all-electric future, the company is now redirecting significant resources towards developing high-tech internal combustion engines (ICE). This strategic pivot comes as Mercedes acknowledges the challenges and setbacks facing the electric vehicle (EV) industry.
In recent statements, Mercedes CEO Ola Källenius revealed that the company would continue to develop combustion engines “well into the 2030s.” This pivot comes after Mercedes initially declared a move from an EV-first to an EV-only strategy, promising to phase out ICE vehicles by 2030. The updated approach acknowledges that the path to full electrification is more complex and challenging than initially anticipated.
“Combustion engines are going to last well into the 2030s,” said Källenius, as reported by Motor1.
Mercedes’ revised strategy highlights the practical challenges automakers face in their electrification efforts. Despite initial enthusiasm, several obstacles have emerged, including inadequate EV charging infrastructure and lower-than-expected consumer demand. These issues are not unique to Mercedes; other automakers like GM have faced similar hurdles, exemplified by the costly recalls of the Chevy Bolt due to faulty battery packs.
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The trend of automakers scaling back their electrification timelines is becoming more common. Just three years ago, executives from M-B parent company, Daimler, told Automobilwoche the automaker was “switching from EV first to EV only.” The brass went on to say that every model in the lineup would have a fully electric version, and that Mercedes would switch to a “business without diesel and gasoline engines” by the end of the decade, as Automotive News reports.
However, as the industry grapples with the practicalities of this transition, many companies are revising their strategies. Opel aims to be fully electric by 2028, Jaguar by 2025, and Volvo and Bentley by 2030. Even Ford has committed to selling only EVs in Europe by 2030. Yet, these timelines are increasingly seen as ambitious.
Despite these setbacks, Mercedes remains committed to reducing carbon emissions and achieving carbon neutrality by 2040. The company plans to invest €14 billion (approximately $15 billion) into its passenger car division to meet this goal. This investment will fund advancements in both electrification (including hybrids) and digitalization, but a significant portion will be directed towards developing new, more efficient combustion engines.
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Mercedes’ renewed focus on ICE technology aims to comply with stringent emissions regulations, such as Euro 7 and China 7 standards. By optimizing current engine and transmission combinations, the company seeks to minimize CO2 emissions and avoid substantial fines. The development of high-tech combustion engines is seen as a necessary step to meet these regulations and ensure compliance while continuing to innovate.
While Mercedes has acknowledged the difficulties in achieving an all-electric future, the company is not abandoning its electrification goals entirely. The investment in ICE technology is seen as a pragmatic approach to balance the immediate regulatory requirements with the long-term objective of reducing carbon emissions. This strategy allows Mercedes to remain competitive and financially stable during the transition period.
Mercedes-Benz’s decision to reinvest in internal combustion engine technology underscores the complexities of the automotive industry’s shift towards electrification. The company’s pragmatic approach reflects the broader industry’s realization that the transition to EVs will require a more gradual and balanced strategy.
